Ready for big health insurance premium increases? They’re on the way, thanks to Obamacare. As conservatives have been warning since the awful (and horribly named) Affordable Care Act was passed, the President’s promises of lower premiums was in indeed, an empty promise.
Well now the chickens are coming to roost. Not only have premiums for health insurance increased since Obamacare was passed, it’s about to get a whole lot worse:
Health insurance companies are amplifying their warnings about the financial sustainability of the ObamaCare marketplaces as they seek approval for premium increases next year.
Insurers say they are losing money on their ObamaCare plans at a rapid rate, and some have begun to talk about dropping out of the marketplaces altogether.
“Something has to give,” said Larry Levitt, an expert on the health law at the Kaiser Family Foundation. “Either insurers will drop out or insurers will raise premiums.”
While analysts expect the market to stabilize once premiums rise and more young, healthy people sign up, some observers have not ruled out the possibility of a collapse of the market, known in insurance parlance as a “death spiral.”
That’s terrific. And there is more!
It’s more important to watch what happens with Blue Cross Blue Shield plans, which are the backbone of the ObamaCare marketplaces.
There have been some rumblings of discontent from Blue Cross plans. The plan in New Mexico already dropped off the marketplace there last year after it lost money and state regulators rejected a proposed 51.6 percent premium increase. Now, Blue Cross Blue Shield of North Carolina says that it might drop out of the marketplace because of its losses.
Blue Cross of North Carolina CEO Brad Wilson said in an interview that the company had lost $400 million due to its ObamaCare business.
“We’re not alone, and I think that that also is evidence to suggest that there are systemic and fundamental challenges that we all need to have a civilized conversation about,” Wilson said.
Ironically, it was insurers who were some of the biggest backers of Obamacare, thinking all of these enrollees would be a big business boon to them. What they didn’t account for was the fact that despite all of the bragging by the administration, not as many people have signed up as they thought.
The people who are signing up are not as healthy as those who declined coverage (paying the fine instead). As such, the insurers are finding out they’re paying out more than they are taking in.
Everybody was warned. The only question is, how bad will it get before the system collapses?