American Elephants


The Unaffordable Care Act Becomes More Unaffordable by The Elephant's Child

The health insurance policy rate hikes in excess of 6% in December were the largest reported since Morgan Stanley’s research team first started conducting quarterly surveys of insurance brokers in 2010. The April survey shows the largest rise in small and individual groups perhaps ever. The average increases are in excess of 11% in the small group market and 12% in the individual market. Some state increases are 10 to 50 times that amount. The analysts conclude that the “increases are largely due to changes under the ACA.”

The analysts conducting the survey attribute the rate increases largely to a combination of four factors set in motion by Obamacare:  Commercial underwriting restrictions, the age bands that don’t allow insurers to vary premiums between young and old beneficiaries based on the actual costs of providing the coverage, the new excise taxes being levied on insurance plans, and new benefit designs.

For the individual insurance market (plans sold directly to consumers); among the ten states seeing some of the sharpest average increases are: Delaware at 100%, New Hampshire 90%, Indiana 54%, California 53%, Connecticut 45%, Michigan 36%, Florida 37%, Georgia 29%, Kentucky 29%, and Pennsylvania 28%.

For the small group market, among the ten states seeing the biggest increases are: Washington 588%, Pennsylvania 66%, California 37%, Indiana 34%, Kentucky 30%, Colorado 29%, Michigan 27%, Maryland 25%, Missouri 25%, and Nevada 23%.

Think of the bride whose intimate garden wedding grows into a society-page extravaganza as the guest list keeps growing. The simple two-tier wedding cake turns into a multi-storied  edifice with elaborate floral icing on each layer. Not going to cost the same, and all those unneeded flowers and loops add to the cost, just as pediatric dentistry for 60 year-olds adds to the cost on an insurance policy. The massage therapy and acupuncture make a nice selling point, but it really isn’t free.

Since these hikes aren’t coming from HHS, but from the insurance companies, where it cannot be put off till “after the election,” it’s going to get interesting. Affordable Care indeed!

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