A few
months ago, Obamacare critics were pointing to alarming predictions that
some insurance rates would spike when the law took effect – by as much
as 41 percent in Wisconsin, 85 percent in Ohio, and so on. In Virginia,
though, the potential increases are not all that bad.
Some are actually much worse.
Virginia’s State Corporation Commission soon will assume control over
insurance policies offered through the new state-level exchange. That’s
where those who don’t get insurance through their employers will shop
for policies they will be forced by law to obtain.
Recently the SCC asked Virginia’s major underwriters to provide
information on what they charge now and what they will charge starting
Jan. 1, when Obamacare regulations take effect. Specifically, the SCC
asked for rate estimates in both the individual market and the
small-group market.
In the individual market, the SCC asked for the rate for the most
popular insurance plan for a 29-year-old male; a 45-year-old couple with
two children; and a 60-year-old couple. For the small-group market, the
SCC sought quotes for a business with eight 29-year-old male employees;
a business with four male and four female employees, all 45; and eight
60-year-old female employees.
Ready for the results? Brace yourself.
Aetna says its most popular policy for a 29-year-old man currently
costs $118 per month in Richmond. Once Obamacare kicks in, the rate will
jump to $225 – an increase of more than 90 percent.
Obamacare supporters say this is only natural, because one of the
ideas behind expanding coverage is to get young, healthy people to help
pay the health-care costs of sicker, older people. (Not exactly a point
they stressed during debate over the bill, but never mind.) That’s why
the law forbids charging the latter more than three times the rate
charged to the former. Jacking up rates for “young invincibles” is
supposed to help hold down rates for old vulnerables.
But it doesn’t appear to be working. Aetna says its rate for the
family with two kids is liable to jump 36 percent, and the rate for the
older couple is liable to jump 44 percent.
The CareFirst BlueChoice outlook is similar: Premium increases of 108
percent, 40 percent, and 36 percent, respectively. For Group
Hospitalization & Medical Services (an independent licensee of Blue
Cross and Blue Shield), the percentage hikes are: 113, 89, and 69.
Where’s the “affordable” part in the Affordable Care Act?
For small employers, things could be equally grim. Take Optima,
whichoperates in the Hampton Roads area. Optima says the premium for a
policy covering eight young male employees – a landscaping business, say
– could jump 132 percent. A similar policy for Anthem’s Healthkeepers
would double in price.
Not all the premium increases are this bad, and the increases for
companies with female employees are smaller. Obamacare’s defenders may
seize on that as proof that the president’s signature policy is working.
There’s just one problem: It isn’t working according to the president’s
own standards. “If you already have health insurance,” candidate Obama
promised, “the only thing that will change for you under this plan is
the amount of money you will spend on premiums. That will be less.” The
law’s advocates echoed the talking point; MIT’s Jonathan Gruber, for
instance, said “What we know for sure the bill will do is that it will
lower the cost of buying non-group health insurance.”
To be fair, many people will be eligible to receive subsidies
offsetting part of the bill, and some of them – though by no means all –
might see lower costs year over year. But this does not reduce the
actual cost, it only shifts some of it. And cost-shifting – such as a
hospital charging ten bucks for aspirin to subsidize emergency-room care
for the uninsured – was supposed to be something Obamacare would
reduce, wasn’t it?
The ACA’s cheerleaders also might argue that what happens in the
state exchanges is a sideshow, since most people get their insurance
through their employers anyway. This is not an argument made gracefully
by those who, during debate over the bill, lamented the 45 million
Americans without health insurance. They were supposed to be the chief
reason for the law’s passage. Some sideshow.
What’s more, the non-group market will grow more relevant, not less
so, as time wears on. Thanks again to Obamacare, companies are either
dropping health-insurance coverage altogether, shifting employees to
part-time status to avoid providing coverage, or (if they’re small)
finding ways to avoid crossing the 50-employee threshold for mandatory
coverage. Partly because of such developments, the leaders from three of
America’s biggest unions, including the Teamsters’ James Hoffa, wrote
to the administration complaining that “you pledged that if we liked the
health plans we have now, we could keep them. Sadly, that promise is
under threat.” Their support for the president, they said, “has come
back to haunt us.”
The administration has delayed the employer mandate for a year. But
when it kicks in, it will dump many more people into the exchange
market. There – if the news from the SCC is any guide – they will get a
rude awakening.
