Health Insurance is Going to Get Even More Expensive for 2016

Health insurance premiums are going up…again.  It shouldn’t be any surprise.  We have a broken system that cannot pay for itself. Thus, someone has to pay for it.  Insurance companies are requesting 20 to 40% increases in insurance premiums for 2016.  Last year, at least in the DFW area, we were soaked for around a 20% increase.  The health insurance companies are discovering that people are sicker than they thought.  In many cases, health insurance costs are exceeding the actual premiums that health insurance companies are taking in.

Blue Cross and Blue Shield is clearly the biggest player in the Affordable Care Act.  They are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota according to a CNBC article.

The article cites President Obama saying that consumers should put pressure on state insurance regulators to scrutinize the proposed rate increases. If commissioners do their job and actively review rates, he said, “my expectation is that they’ll come in significantly lower than what’s being requested.”

Either our President is truly disconnected (which I don’t think he is) or he is having difficulty coming up with a say to spin this situation.   

Then there is this response from Sylvia Mathews Burwell, the secretary of health and human services.  Mrs. Burwell said consumers could also try to find less expensive plans in the open enrollment period that begins in November. “You have a marketplace where there is competition,” she said, “and people can shop for the plan that best meets their needs in terms of quality and price.”

Reality check is that there is not that big of a difference in costs for these plans. The only way to get a cheaper plan is to go straight with the HMO which is the worst option on the marketplace. Doctors know it which is why they are fleeing HMO’s quicker than you can say lower pay-outs for doctors.

Health insurance companies aren’t out there to give anyone a good deal.  It is about survival.   One insurance company collected premiums of $39.7 million and had claims of $56.3 million in 2014. It has requested rate increases averaging 45 percent for 2016.

It is simple math.  At what point do we reach a tipping point where consumers simply cannot afford the “Affordable Care Act.”   When the ACA became law I felt we would be in a honey moon period for a few years before they started aggressively increasing premiums.  Unfortunately, that is not the case. 

What’s even more unfortunate, they will raise the rates only in the higher income areas and leave alone the rates for the lower income areas.  It is wealth redistribution.  They did it in 2015 and they will do it again.  Welcome to unsustainable socialism!


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