Several health insurance businesses across the nation are looking to and winning increases in premium payments for their customers, several in the double-digit numbers.
This continues to happen even though of the most critical objectives of President Obama’s administration and its health care law was to restrict this fast-paced rise in insurance cost for clients. Small business and individuals who do not have insurance provided by their employers are particular vulnerable to this issue. These individuals and small businesses will have to end up buying health insurance on their own. In the state of California, the major insurance business Aetna is proposing increases in premium rates of as high as 22%. The other major players like Anthem Blue Cross is proposing increases in premium rates of as high as 26% whereas Blue Shield is proposing a 20% increase in the premium rates to customers. These numbers have been retrieved from the insurance provider filings with the state department for the year 2013. In 2010, when Anthem Blue Cross increased their rates by 39%, there was a drive to bring into effect the Affordable Care Act. This act was passed the very same year as the rise was announced; however the Act would not completely by in effect until the year 2014.
Despite the Act having been passed, the current rate increases still appear striking enough. In states like Ohio and Florida, insurance providers have also raised premium rates by at least 20% for some customers. This rate of increase can easily translate to a few hundred dollars per month. For households with policies provided by their employers, this proposed rate of increase for premium payments would translate to about a 4% increase.
Under the current health care law, health regulators are required to monitor and review any kind of request for a premium rate increase of 10% or more than 10%.
These requests will get posted to the federal website along with evaluations from the health regulators. The federal website that will contain these rate increase requests is healthcare.gov. The review process carried out by the regulators not only provides an insight into the strong disparity between the premium rates themselves, but it also showcases the striking dissimilarities between states like New York and California. New York is one of the thirty-seven states where regulators have been provided authority to deny or push back rate increase requests. They have been provided this authority by the legislature and can do this for requests where rate increases are considered excessive. California is one of those states where regulators do not have this authority. Recently, New York used these special powers to hold off on premium rate increases which had been suggested for 2013.
Using their authority, regulators were able to hold premium rate increases to under 10%. On the other hand, states like California can review requests for premium rate increases but they do not have the authority to deny these increases. In some states, despite strong evidence that costs associated with health care have actually reduced in the recent years, double digit rate increases are still being made.
This is causing several people to delay their medical and health care treatments because of the slow economy and rising health care insurance premiums. The leading financial analyst house PWC estimates that health care costs may only increase about 7% next year. This rate of increase is well below the premium rate increases that have been suggested by some insurance companies. Even so, insurance companies provide counter arguments stating that for some insurance policy holders, medical costs are increasing much more rapidly as compared to the average costs. This is leading to a suggestion that these individuals live within a sicker population of individuals. On the other hand, federal regulators argue that premium payments would still stay within the law, where limits are set on the profit numbers and administrative costs and rebates are provided to individual insurance policy holders if insurance providers exceed those pre-determined limits.
The insurance commissioner of California and a couple of the health regulators in the state have mentioned that without a federal provision in place which gives regulators the authority to deny excessive premium rate increases, certain insurance providers will have the flexibility to raise premium rates as much as they can before the law gets enacted. They have noted that this continues to be a major loophole within the Affordable Care Act. Without legislative backing, they can only question the rate increase, not deny it.