A bit of foreboding news you might have missed this past week: Insurers in Maryland's individual Obamacare market have proposed an average 32 percent increase in health insurance premiums. The rate hikes range from 18 percent to a whopping 91 percent. This follows a similar announcement in Virginia, where insurers are proposing average rate hikes from 15 to 64 percent.
States across the country, including North Carolina, can expect similar proposed hikes in coming months. Obamacare sticker shock is coming, and it's going to hit rural areas especially hard.
Hold on. Aren't insurers mostly profitable in the Affordable Care Act's individual markets? Yes, they are. So what's happening? Exactly what insurers and health care experts predicted when Republicans sabotaged the Affordable Care Act last year.
When Republicans repealed Obamacare's individual mandate, they changed the economic viability of the Affordable Care Act, which counted on healthy people's premiums defraying some of the cost of insuring the less than healthy. In addition, the Trump administration scrapped subsidies to insurers and gave healthy folks more reason to leave the exchanges by allowing insurers greater room to offer thinner policies that cost less money.
The result: More people will bolt the exchanges, which will be left to people who have preexisting conditions or need more extensive coverage. Those people are costly to insurers. So rates are going up.
Here's a roadmap of what's to come:
▪ The summer and fall months will be filled with insurers proposing startling rate hikes in states across the country. (State regulators will have to approve those increases, so the numbers will come down a little, but not much.) In some rural areas, insurers will determine that the customer pool is just too unhealthy and expensive, and the insurers will leave those individual markets altogether.
▪ Republicans will say this is Obamacare's fault, and their answer will be to ease regulations and offer more options outside the ACA to those who can't afford the rate hikes. But many of those options will be thin policies with high deductibles that benefit only healthy Americans. Millions of others, including middle class Americans who don't qualify for ACA subsidies, will lose the coverage and critical benefits that Obamacare provided.
▪ It will be an election issue in November, and voters should remember this: Obamacare needed tweaks, but it was working, despite what the president and Republicans have long claimed. Millions more Americans had health care coverage. That coverage included benefits that insurance companies largely didn't offer before Obamacare. Also, insurance premiums were rising at a rate lower than the years before the Affordable Care Act was enacted.
Now, for many, those premiums are about to go way up, and insurers are being given more leeway to offer less. What's old is new again. And it's exactly what Republicans wanted.