Bombshell 2016

Obamacare premiums to JUMP in 2016

Sure there were always the obvious jokes about the Unaffordable Care Act (ACA). But under strict scrutiny, insurers are requesting rate increases. HUGE increases. These increases, unfortunately or fortunately, are in line with dramatic increases in spending on health care by the insurance companies.

Why?

Very simply, the ACA changed how health premiums get calculated. How dare you charge less to (healthy) people who use less health care! How dare you charge less for non-smokers (in California). How dare you charge more for people who have had elective cosmetic surgery (breast implants which notoriously leaked and caused all kinds of damage in the 1990s). In the old system, those people might have paid more or get put into the state major risk program.

The new regime says: Let's charge the same regardless of pre-existing conditions. Good health; doesn't matter. Smoker/non-smoker/drug use: doesn't matter. As a result, people using the exchange are older, sicker, and savvy-er about using their benefits. One official said there was 'pent up demand' for all these great new health benefits, thus showing how necessary and important Obamacare is. These rate increases are significant because they are based on the first full year of claims experience under Obamacare.

I have worked with a lot of families who simply can't afford ACA. They try to buy the lowest cost plan. But the deductibles and co-pays are so high, they can't afford to actually use the insurance. On top of a $5,000 deductible, the premium seems like a waste of money. On top of that, premiums are now expected to climb 25% to 40% for 2016 in some jurisdictions according to the NYT.

CNBC link to NYT story

Funny how the NYT didn't report the potential for miscalculation and over-utilization before the law was put into place. [Welcome to the party guys. You're only 4-5 years late.] But they do report with gusto that ONLY 15% buy ACA coverage on an unsubsidized basis. That means 85% buy it with subsidies; and that's before we add in the 50% to 100% increase in medicare (free) users.

I'm sure it's wonderful that so many people can now use the healthcare system.
The question is: who is going to pay for it. 
The answer is: you are.

Interesting fact: 

Did you know that EVERY individual health insurance policy (on-exchange and  off-exchange) sold in California has an monthly fee to support the CoveredCA exchange? The exchange has already spent ALL of that money plus over 90% of an additional Billion dollars from the federal government. AND... The ACA allows Covered California to charge assessments or participation fees to health insurance issuers to generate funding, to support its operations.