For those with short memories, for almost two decades prior to the passage of the Affordable Care Act group health insurance premiums registered double-digit increases almost every year. This was a completely unsustainable situation that resulted in a dramatic decrease in the number of small businesses that offered health insurance as an employee benefit. This was also the reason that the South Carolina Small Business Chamber of Commerce began working in 2001 to find and advocate for a solution to affordable health insurance.
While the below story from Consumer Reports addresses only individual policies, I expect the same good results would be found for small group plans offered through the Health Insurance Marketplaces and that is before the business tax credits are taken. And remember that small businesses with fewer than 50 employees don’t even have to offer health insurance.
All the effort we put into helping to mold and then pass Obamacare has paid off, in spite of the continuing myths put out by those that want to roll back the calendar to those glory days of double-digit premium increase.
August 29, 2014
Are health insurance premiums skyrocketing in 2015?
Despite you might have heard, the answer is ‘No!’
“O-care premiums to skyrocket,” said a headline in The Hill, a widely-read website on politics. That dire forecast was a dream come true for legions of the Affordable Care Act’s detractors, who spread the troubling assertion far and wide on conservative media outlets.
The thinly-sourced article was based on assertions by anonymous “insurance officials” and one research organization member who said his “gut” told him that premiums for policies sold on state Health Insurance Marketplaces would go up a lot. But a funny thing happed on the way to 2015: The forecast “skyrocketing” is nowhere in evidence.
Here’s what’s going on with 2015 health insurance premiums and what you need to know.
Increases are in the single digits, a not-terrible showing
With preliminary or final individual premiums available for 31 states and the District of Columbia, the average rate increase is 8 percent, according to the most recent (Aug. 15) update of PricewaterhouseCooper’s interactive map. But 29 states have released only the rates that the insurers have requested, not final rates. And the average masks huge variations: In Arizona, for instance, changes in proposed premiums range from a 23 percent decrease to a 27 percent increase. And in any event, 8 percent is not a terrible rate increase by historical standards. In the three years before the Affordable Care Act was passed into law, the average rate increase in the individual market was 10 percent or more—and that was in an era when insurance companies didn’t have to sell to sick people or offer comprehensive health benefits the way they do now.
Some states are using regulatory mojo to roll back outrageous requests
“Some states have the authority to review rates, and do,” Betsy Imholz, a health insurance expert for Consumer Reports, said. “In other states there have been negotiated reductions.”
In Oregon, for instance, average 2015 premiums came in lower than 2014 rates after regulators got done with them. In Maryland, CareFirst, the state’s dominant insurer, asked for outrageous increases ranging from 23 to 30 percent, but was granted still high, but more modest, increases of 10 to 16 percent. And rates are actually decreasing for other insurers.