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Big hikes coming for ‘affordable’ health plans

Insurers announce double-digit increases for 2017


WASHINGTON—Americans should prepare to pay more for healthcare in 2017.

Beginning Nov. 1, millions of Americans will enroll, re-enroll, or change their insurance through the Health Insurance Marketplace. Insurers have to disclose proposed rate increases of 10 percent or more, and early announcements show many Obamacare participants could face double-digit rate hikes.

Insurers propose to increase premiums on Obamacare exchanges by an average of 11.2 percent for their most popular plans in 18 states. That’s more than twice the 5.2 percent median increase from the year before.

At a Wednesday House Oversight and Government Reform Committee hearing, Topher Spiro of the Center for American Progress said this shouldn’t be a surprise. Losses are normal whenever a business enters a new market, he said, and the same goes for insurance companies within the new Obamacare exchange program. Spiro also noted premiums have risen less than what the Congressional Budget Office originally predicted.

When the Affordable Care Act (ACA) phased into effect in 2014, many companies underpriced their premiums to establish a foothold in the new system, Spiro said. Since then, companies have raised prices to get back on track, and steep increases in 2017 will help bring the market back to an equilibrium.

But ACA detractors say that’s bogus, insisting the law is suffocating insurers and elevating costs across the board—with no end in sight.

“We would love to hear from any Americans who think that their healthcare premiums went down $2,500,” joked Rep. Jason Chaffetz, R-Utah, noting that’s the savings President Barack Obama promised under his plan. “American families are still waiting for the cut in costs. Instead, the health insurance premiums have skyrocketed under the Affordable Care Act.”

Rep. Tim Walberg, R-Mich., said 345,000 Michigan residents will pay on average 17 percent more for their insurance premiums under Obamacare than they paid in 2016. And of the 14 companies selling insurance on the individual market in Michigan, 10 will increase premium rates by double digits. This includes an 18 percent increase by Blue Cross Blue Shield, a near 19 percent increase by Health Alliance Plan, and a 39.2 percent increase for Humana buyers.

In addition to high rate increases, many insurers have suffered huge financial losses since 2014, forcing several to opt out of Obamacare exchanges.

UnitedHealthcare started the trend earlier this year. In April, the nation’s largest health insurer announced it will stop selling coverage on exchanges in 34 states because of financial losses. Then, in August, Aetna decided to drop out of exchanges in 11 states, after reporting a $200 million pre-tax loss in the second quarter of 2016. That forces 167,600 former Aetna customers to purchase new coverage for 2017.

Beginning this year, state insurance co-ops started to fail as well. Of the 23 non-profit co-ops set up as an alternative to commercial plans, only six remain financially viable.

In August, Sen. Ben Sasse, R-Neb., a long-time critic of the ACA, said this trend highlights Obamacare’s “slow-motion death spiral.”

On Monday, Obama acknowledged the health exchanges’ recent turbulence in a letter encouraging his staff to keep hope in the healthcare program.

“We know that this progress has not been without challenges,” he wrote. “Most new enterprises have growing pains and opportunities for improvement. The [health] marketplace, while strong, is no exception.”

Rep. Elijah Cummings, D-Md., said on Wednesday high premium costs have always been a problem and elevated costs for 2017 are not an exception. He said the biggest driving factor of increases in insurance premiums is the rampant rise of prescription drugs. Cummings specifically pointed out the 500 percent price increase for EpiPens—which the Oversight committee will discuss during a hearing next week.

Since 2010, Republicans have voted to repeal or weaken the ACA more than 60 times but have yet to offer a viable plan to replace it.


Evan Wilt Evan is a World Journalism Institute graduate and a former WORLD reporter.


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