Obamacare rates in WA: 13.5% hike for next year

It’s really not that surprising, but health insurance customers on our state’s Obamacare exchange may be in for some sticker shock soon.

Insurers are submitting their rate proposals for next year. According to the Seattle Times, premiums will rise by an average of 13.5% based on the plans customers now purchase:

Health insurers in Washington are requesting a sharp jump in rates for individual plans next year — up 13.5 percent, on average — and fewer options will be offered through the state-run insurance exchange, officials announced Monday.

It may seem like beating a dead horse at this point, but it bears repeating: Obamacare is a long way off from delivering the $2,500 savings for a family of four that President Obama promised in 2008. It was a ridiculous claim then, and it’s been exposed as pie in the sky.

The premium hikes aren’t hard to understand. Insurers are losing money because exchange plans have been most attractive to less healthy customers. As the AP put it, “The health law’s nagging problems center on lower-than-hoped-for enrollment [and] sicker-than-expected customers…”

Nationally, UnitedHealth announced it was largely pulling out of Obamacare’s exchanges, while an analysis for the Blue Cross/Blue Shield Association concluded that members were struggling because they “gained a sicker, more expensive patient population as a result of the law.” UnitedHealth’s pullout included Washington, and Moda has also left our market.

Insurers won’t stay in the market for the privilege of losing money. Premera, which is seeking a 20% rate increase next year, told the Times it lost $117 million last year. It took in $412 million in premiums and paid out $457 million in claims.

The law’s enthusiasts are happy to dismiss such anxieties in ways that miss the point. State Insurance Commissioner Mike Kreidler said, “The requested rate changes are not a surprise, as we expected insurers to make adjustments based on their earlier predictions compared to who actually signed up and what services they used.”

“Who actually signed up” might be a way of saying, “Not the younger, healthier customers we were hoping would pay into the system and underutilize it.”

The federal government’s spokesman emphasized subsidies: “Tax credits that subsidize plans within the exchange rise with premiums, which may insulate 70 percent of Washington consumers from any increase, noted Jonathan Gold, a spokesman for U.S. Health and Human Services.”

That may insulate select customers from the sticker shock, but as premiums rise, the subsidies are getting heftier. That is causing Obamacare’s price tag to balloon, at a time when additional pressures are being put on Medicaid, Medicare, and Social Security.

Much like the $2,500 promise, the estimates about Obamacare’s effect on the federal government’s deficit and debt are being missed by a mile. Just add it to the list of broken promises for this underwhelming law.
-Rob McKenna

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Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.
  • lokiswife

    There is another class of “insureds” now – they can afford to pay their monthly premiums, but can’t afford prescriptions because of high co-pays or that they are no longer covered under their insurance and can’t afford the high deductibles for medical and surgical procedures. They are considered insured for official records, but uninsured for the care they need…A pharmacist told my husband that it is happening more and more, people come in to pick up a prescription and can’t afford either the co-pay or the cost, and leave empty-handed (but they are counted in the number of insureds….)

  • rwittauer

    Rob, I don’t know if anyone has ever told you this, but your doing a great job for Washington State. Thank You

  • Priscilla Schmidt

    I’m curious about how this burden on insurance companies has changed (or not) the burden on hospitals. Before Obamacare, hospitals lost a lot of money by treating uninsured patients and then writing off the cost as uncollectable. Obviously, hospitals are still writing off many patients’ accounts, but has some of that burden just shifted to the insurers of patients newly covered by Obamacare?