American Elephants


There’s No Mention of “Rising Costs” in Obama’s Sales Pitch by The Elephant's Child

The recession (the worst since the Great Recession, they always add) officially ended in June of 2009. Really. Poverty has increased every year. The numbers of long-term unemployed keep increasing. At some point, it should become clear that Democrats just aren’t very good at economics. If you keep that in mind, it explains a lot.

Insurance companies set their premiums based on experience. When they lack experience, as with constantly changing ObamaCare, they have to make assumptions. They hire actuaries, who are people who are really, really good at math, to come up with those assumptions based on history, and worst possible situations, and economics.

Those who designed the Affordable Care Act knew from the beginning that they would have to sign up all those healthy young people who would not require much actual care so their premiums would pay for the older, not-so-healthy people who would need more care. They estimated there were something like 40 million uninsured that they needed to sign up — so they designed in a mandate to force them to purchase insurance. Then they designed in what seemed to be a useful idea that allowed those who hadn’t managed to sign up, to sign up  when they actually got sick, so they could be covered at the last minute. (I told you they weren’t very good at economics). Then when it turned out that all those healthy young people who hadn’t signed up because they were healthy, decided not to sign up because they were healthy, and they couldn’t afford the insurance. How many aren’t signing up? Around 40 million.

Americans buying health insurance outside the new ObamaCare exchanges are being forced to swallow premiums up to 56 percent higher than before the health law took effect because insurance companies have raised the cost to cover all the added features of the new “Affordable” Care Act.

A report on costs from eHealthInsurance, a nationwide online private insurance exchange, shows families are paying an average of $663 a month and singles $274 a month — way more than before ObamaCare kicked in. Most buyers are choosing the lowest level of coverage, the so-called “bronze” plans. In California, for example, some families are paying a high of $2,504 a month, and in New York, $1,845.

The shocking surge in prices show what Americans not in ObamaCare or covered by their employer are paying as they look for lower premiums. Typically they are not eligible for subsidies that ObamaCare offers to those with low incomes.

Premiums are increasing because of the new required provisions for 2014 Affordable compliant plans — including guaranteed issue, essential health benefits, modified community rating and minimum actuarial values. It is likely insurance companies expect additional risk because people with pre-existing conditions could no longer be denied coverage, and have priced their plans higher to cope with this risk.

The Hill reports:

Health industry officials say ObamaCare-related premiums will double in some parts of the country, countering claims recently made by the administration. The expected rate hikes will be announced in the coming months amid an intense election year, when control of the Senate is up for grabs. The sticker shock would likely bolster the GOP’s prospects in November and hamper ObamaCare insurance enrollment efforts in 2015.

Kathleen Sebelius has tried to downplay concerns about rising premium costs but her comments baffled insurance officials, who said it runs contrary to industry consensus. The Obama administration has embarrassed itself in trying to recruit young people with a “Between Two Ferns” interview, with “Pajama Boy,” and “Angry Mom.” Obama has been rewriting the law as fast as he can to delay any unpleasantness until after the election, but insurers must present their premium increases to state officials for formal approval this summer.

In Iowa, which hosts the first presidential caucus in the nation and has a competitive Senate race this year, rates are expected to rise 100 percent on the exchange and by double digits on the larger, employer-based market.

I think ObamaCare is on life-support, but brain-dead. They just aren’t ready to admit it’s hopeless.




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