Major insurers in some states are proposing up to 51 percent premium increases for
health plans sold under the Affordable Healthcare and Patient Protection Act,
commonly referred to as Obamacare. Despite single digit increases for 2015,
insurance companies are seeing their costs jump and are demanding to be
compensated with dramatically higher rates.
When Insurance plans
proposed 2015 rates last summer, they had only a little information about the
health of the new customers they expected to sign up during the fall Obamacare
expansion. Big insurers tended to ask for increases of less than 10%, while
some smaller insurers tried to under-cut pricing by the major’s to take market
share, according to the Wall Street Journal.
The Affordable Care
Act was rushed into law and implemented with what now appears to have been
grossly defective actuarial assumptions regarding costs. The same consumer
groups that fought for Obamacare are already demanding federal and
state officials put premiums under the microscope to curb some increases.
But with healthcare
inflation running far ahead of inflation and insurers saying their huge
proposed rates only reflect the revenue they need to pay claims, Obamacare
seems destined to loom as a financial and political crisis this summer.
