Guess what? Health insurance rates are going up, possibly by double digits, just weeks before Election Day.
The last thing Democrats want to contend with just a week before the 2016 presidential election is an outcry over double-digit insurance hikes as millions of Americans begin signing up for Obamacare. But that looks increasingly likely as health plans socked by Obamacare losses look to regain their financial footing by raising rates . . .
“I think a lot of insurance carriers expected red ink, but they didn’t expect this much red ink,” said Greg Scott, who oversees Deloitte’s health plans practice. “… A number of carriers need double-digit increases.” . . .
Blue Cross and Blue Shield plans, which dominate many state exchanges, saw profits plummet by 75 percent between 2013 and 2015, according to an analysis by A.M. Best Co. A chief reason for the financial woes: “the intensity of losses in the exchange segment.” Health Care Service Corporation, which operates Blue plans in five states, dropped out of New Mexico’s exchange for this year after regulators refused to approve rate hikes as big as the company sought. In Texas, Illinois and two other states where HCSC does business, medical costs for individual customers exceeded premiums by more than $1.3 billion last year.
One big reason is lower-than-expected enrollment of younger, often healthier people who balance the costs of those who require more costly care. Roughly 12.7 million Americans signed up for Obamacare plans during the most recent open enrollment period. That’s far below the 22 million projected by the Congressional Budget Office, and it’s certain to decline as some drop out.
This is as predicted. Obamacare is not just a program for the uninsured, it’s a tool to put insurers out of business by forcing them into coverage decisions that don’t make economic sense. The insurers greedily grasped at the dazzling prospect of millions of new customers, without accurately accounting for the inability of these new clients to pay up.
And now, they’re stuck trying to make paying customers foot the bill.
Maybe they thought the government would understand this and help them by changing the rules. But the government doesn’t care about their bottom line, and it doesn’t understand saving the golden goose laying the eggs. What it will do is take over the system should the private sector fail and then run it at a loss, like the government does with any enterprise in which it is engaged.
And that is what Obamacare is really all about.