Major healthcare insurance carriers have been asking for huge rate increases in premium rates for 2016. One state, Oregon, actually recommended rate increases higher than the insurance carriers were requesting. In many states, rate increases being requested are greater than 10% with some reaching 50% or higher.
The reasons for the rate increases are that the insurance companies are losing large amounts of money under Obamacare. The system was designed to have large numbers of healthy younger adults enrolling and paying their premiums which would offset the more expensive coverage of seniors and those with chronic illnesses. However, the majority of enrollees are older and less healthy people. The expected high number of healthy young adults has failed to materialize.
The backlash of the high rate increases is fueling more debate on the success or failure of the Affordable Care Act. In an attempt to deflect the negative impact of the huge rate increase requests, the Obama administration is asking states to reduce the high rate increases being requested.
The administration is using the increased tax penalty in 2016 for not having health insurance to persuade insurance carriers that more Americans will sign up for coverage. Based on prior claims and what has actually happened, it’s doubtful if that many healthy young adults will enroll to offset the millions of dollars lost by carriers last year.
It will still be far less expensive for my wife and I to pay the fine than it will be to pay over $800 per month for coverage that will only pay 60% of our medical costs after we pay a $4,000 deductible and I know we’re not alone.
If the Obama administration succeeds in getting states to cut back the high rate increase, it will result in the financial collapse of some major health insurance carriers who already lost several hundred million dollars last year and are still losing money this year.
Privately and publicly owned businesses cannot continue to operate after losing millions of dollars year after year. Only the US government seems to be able to operate under those conditions and it appears that it’s that flawed mindset of the Obama administration that is trying to bankrupt major healthcare insurance providers.