The Greenville News
August 3, 2013
“I would strongly encourage the public not to get too excited about these numbers, because there’s actually good news coming in federal subsidies,” said Frank Knapp, president and CEO of the South Carolina Small Business Chamber who supports the changes to how customers buy health insurance.
Health law to hit some hard
Health insurance premiumsfor those in South Carolina who aren’t covered through their employers could rise dramatically next year once the federal government’s Affordable Care Act takes effect, according to a state insurance agency’s review that proponents of the new health care law insist doesn’t paint a complete picture.
The state Department of Insurance on Friday released the results of its review of health plans that insurance companies want to offer on the new federally subsidized insurance exchanges that are required under what’s commonly referred to as Obamacare.
The agency’s director, Ray Farmer, said that average rates for individuals buying insurance will likely increase between 50 to 70 percent, and in some cases could more than double depending on age, health and insurance needs.
Those who participate in small group plans will likely see average rate increases between 10 to 20 percent, Farmer said.
Premiums for people who are insured through employer-sponsored plans won’t be affected when new coverage plans go into effect on Jan. 1, he said.
“Due to a number of new federal requirements going into effect next year as part of the Affordable Care Act, consumers should plan for premiums to increase significantly,” Farmer said.
The estimates are based on comparing plans insurance companies offer now to those they have submitted for exchange enrollment on Oct. 1.
However, critics of the findings said Friday that the analysis doesn’t elaborate on other factors of the health care law, such as federal subsidies that will help most customersafford the premiums.
“I would strongly encourage the public not to get too excited about these numbers, because there’s actually good news coming in federal subsidies,” said Frank Knapp, president and CEO of the South Carolina Small Business Chamber who supports the changes to how customers buy health insurance.
The insurance plans offered today aren’t comparable and in fact many wouldn’t be allowed under provisions of the new law that ban limits on pre-existing conditions and mandate coverage for everyone, said Cheryl Fish-Parcham, deputy director of health policy for the advocacy group FamiliesUSA.
“Insurance will be covering more than it has in the past,” she said. “In the past, many people faced crazy exclusions of benefits like buying coverage but it not covering maternity care for a woman. For the first time, people are going to be getting real coverage that covers them.”
The state’s largest insurer, BlueCross BlueShield, said the rates it submitted for review were fair but that new requirements must be taken into account, such as more benefit requirements, federal taxes and fees, changes in how companies must calculate rates and guaranteed coverage.
“These additions and changes add unavoidable, additional expense for our customers,” said BlueCross spokeswoman Elizabeth Hammond.
Lawmakers in South Carolina have fought implementation of the health care law from the start, citing an overreach of government authority that requires people to buy health insurance they might not want.
The state opted not to create a state exchange, instead relying on the federal government’s system, and rejected federal money expanding Medicaid.
“Today’s news that insurance premiums in South Carolina may skyrocket as much as 70 percent for some South Carolinians is as awful as it is unsurprising,” said Doug Mayer, spokesman for Gov. Nikki Haley.
About 900,000 uninsured South Carolina residents will have to sign up for insurance or face fines under the law.
In 2014, a person who doesn’t pay for health insurance but is deemed financially able to faces a fine of $95 or 1 percent of annual income, whichever is greater. The fine is $47.50 per child but no more than $285 for a family.
In 2015, the fine increases to $325 per adult, $162.50 per child but no more than $975 for a family, or 2 percent of annual income.
The fine in 2016 and beyond will be $695 per adult, $347.50 per child but no more than $2,085 for a family, or 2.5 percent of annual income.
The fine wouldn’t provide health insurance if a person got sick.
The federal government must now approve the exchange plans insurance companies submitted to the state.
Of South Carolina’s 12 health insurers, four will be selling policies on the exchange with the remaining selling alternate policies off the exchange, Farmer said.
The policies off the exchange will be reviewed in the next 45 days, he said.
The insurance department provided wide-ranging estimates for how the new requirements could impact premiums.
For instance, a person at age 20 could see rates increase anywhere from 5 to 151 percent, Farmer said. A person age 40 could see increases between 2 to 162 percent, a person age 60 between 13 to 134 percent.
The department is “actively working with all carriers seeking approval of filings for products to be sold in the state,” Farmer said.
“It’s a new process for everyone,” he said. “I encourage our citizens to shop around.”
