Recently, Breitbart News broke the story last week that major insurers in a number of states were proposing up to 51 percent healthcare premium increases for Obamacare policies. Now Illinois and Pennsylvania are also seeking 2016 rate hikes in the range of 30 percent.
The Obama administration late Monday afternoon disclosed more state Patient Protection and Affordable Care Act health insurance exchanges are also requesting stunningly large average health insurance premium hikes, including Blue Cross and Blue Shield of Illinois asking for an average 29 percent spike and Highmark Health Insurance Co. of Pennsylvania asking for a 30 percent spike, according to the Wall Street Journal.
This grim news follows reporting that New Mexico’s market leader ,Health Care Service Corp. is asking for an average premium spike of 51.6 percent. In addition, Tennessee’s top insurer, BlueCross BlueShield of Tennessee wants an average spike of 36.3 percent; Maryland’s market leader, CareFirst BlueCross BlueShield, requested an average spike of 30.4 percent; and Oregon’s top insurer, Moda Health, is seeking a 25 percent spike.
Under Obamacare, insurers must file proposed premium rates with their local state regulator and the federal government by June for the following year beginning January 1. The 2015 rate requests ran to about three times of the 2 percent inflation rate, or 6 percent. At the time, insurance companies had only a little information about the health of the new customers they expected to sign up during the fall Obamacare expansion.
But now insurance companies across the nation are seeing their costs leap due to high utilization costs from people newly enrolled under Obamacare. Insurance companies demanding dramatically higher compensation are causing skyrocketing rates.
The steep rate requests are coming just 60 days after Democrats were ecstatic about a Robert Wood Johnson Foundation study that supposedly “Confirms that Obamacare is Saving States Money.” and a Kaiser Family Foundation study that reported similar findings for Connecticut, New Mexico, and Washington State. Researchers claimed Obamacare “expansion can produce savings in tax dollars and generate new revenue for state budgets.” As an example, Kentucky was expected to save an estimated $820 million, and Arkansas was supposed to save $370 million, according to Think Progress.
But both the Johnson and Kaiser Foundation analysis now look preposterous. Obamacare was sold as reducing the cost of healthcare inflation to below the national inflation rate. But with the current inflation rate slightly negative and the average of the Obamacare state premiums spiking by 30 percent, the exploding cost burden of Obamacare may explain a big part of the recent economic slowdown.
The new requests for huge premium hikes come as the Democrats and Republicans are under both under high stress as they wait to see what the Supreme Court will decide in King v. Burwell, which could decimate the Left’s biggest expansion of entitlements in 50 years. If the Supreme Court strikes down federal money for states that did not establish their own exchanges, 13 million people will lose about $120 billion in federal health insurance subsidies.
In the 2016 elections, the spectacular insurance premium increases should help Republicans that voted unanimously against Obamacare look smart. It may also serve as a dunce cap for Democrats that promised the law would “Cut the cost of a typical family’s health insurance premium by up to $2,500 a year.”