The Obama administration has delayed many new laws until after the 2014 elections. They did that for a reason:
Now that insurers have seen the composition of their new risk pools under Obamacare, they have to calculate their new pricing levels for state and federal regulators. The pricing jump for 2014 was more speculative, based on the presumed demographic composition of incoming enrollees. The pricing proposals from Virginia and Washington indicate that the new enrollments made the risk pools riskier than first thought.
Gee, who would’ve thought that forcing healthier, higher-income individuals to pay for the insurance for
fatter lazier dumber unhealthy poor people would increase the risks (and the amount of money that the insurance companies would have to pay out to treat them)?
Rate-proposal filings in the state of Washington show the four largest insurers proposing average increases across their plans ranging from 8.1 percent to 11.2 percent in a single year. Jonathan Wu of Value Penguin analyzed the proposals and concluded that the insurers tried betting on success, and came up short. “What is troubling about the data is that among these insurers, there is clearly an issue with the premiums offered in the first enrollment period,” Wu writes. Noting that the four companies offered the lowest prices in the market this year, their enrollment numbers are not surprising, but their consumers may get a less-pleasant surprise by the end of the year.
And don’t count on employers keeping you on their insurance plans either.
However, the steep price increases coming in this market already have businesses looking at bailing out of health coverage for their employees…
AmeriMark, a catalog retailer with 700 employees that has long provided coverage for employees. However, the premiums for their 2013 plans escalated 30 percent for 2014, so they switched carriers and forced employees to pay a higher share of premiums with higher deductibles and co-pays.
AmeriMark is planning for an 8 percent increase for 2015 and expects to keep insurance coverage – for now. If prices continue to escalate, AmeriMark President Louis Geisler warned, that decision will likely change.
Geisler won’t be alone in that decision. Businesses will have to react to dramatic price increases, either by passing them onto the employees and eating into their wages or by passing them along to the consumer.
I will end this post with a quote from our Dear Leader:
“What happens on October 1, in 53 days, is for the remaining 15 percent of the population that doesn’t have health insurance, they’re going to be able to go on a website or call up a call center and sign up for affordable, quality health insurance at a significantly cheaper rate than what they can get right now on the individual market,” Obama said on Friday.