Death Spiral: Obamacare Exchange Premiums to Spike by 38% in 2018

A new study from Avalere Health reveals that Obamacare exchange “silver” plans will rise by an average of 34 percent in 2018, another startling statistic detailing Obamacare’s death spiral.

Avalere experts attributed the rise in Obamacare exchange premiums to a number of factors, including the elimination of the cost-sharing reduction (CSR) payments, lower enrollment in the Obamacare exchanges, low health insurer participation, and general volatility around the policies governing the Obamacare exchanges.

Caroline Pearson, senior vice president at Avalere, blamed the Trump administration for ending the CSR program as one of the principal reasons for the skyrocketing premiums. In a statement, Pearson said, “Plans are raising premiums in 2018 to account for market uncertainty and the federal government’s failure to pay for cost-sharing reductions. These premium increases may allow insurers to remain in the market and enrollees in all regions to have access to coverage.”

The cost-sharing reduction payment program gives health insurance companies subsidies to help cover the cost of low-income and high-cost patients on the Obamacare exchanges. Democrats and Republicans disagree on the impact that the subsidies would have on the individual health insurance market.

The Centers for Medicare and Medicaid Services (CMS) reported that 1,524 counties, almost half of counties nationwide, could only have one insurer on the Obamacare exchanges in 2018.

Conservatives such as Sen. Rand Paul (R-KY) and Daniel Horowitz have argued that the cost-sharing reduction payment program amounts to a bailout fund for health insurance companies.

Contrary to Pearson’s claim that “uncertainty” and ending the CSR payments has led to increasing premiums, Breitbart News reported that most of Obamacare exchange premiums’ skyrocketing price levels resulted from health insurers’ near monopoly status on the Obamacare exchanges and onerous Obamacare insurance regulations.

The Investor’s Business Daily believes that Medica wants to abuse its dominance in the Iowa exchange and blame Trump instead.

The Investor’s Business Daily editorial charged: “Not surprisingly, Medica has used its newfound monopoly status to push for increasingly higher rates, while trying to pin the blame on President Trump for the increases.”

Also, a McKinsey & Co. study found that Sen. Ted Cruz’s Consumer Freedom Amendment would allow health insurers to offer plans that do not comply with Obamacare regulations as long as they offer plans that do follow the Obamacare rules, which could substantially lower healthcare premiums.

A McKinsey & Co. study found that the Consumer Freedom Amendment could lower Obamacare-compliant plans for a 40-year old as much as 30 percent and premiums for non-Obamacare compliant plans could be 77 percent lower compared to Obamacare plans.

Jim DeMint, former U.S. Senator and now a senior adviser to the Convention of States, explained that the Cruz amendment remains a promising solution to the crushing costs of Obamacare.

“What Sen. Cruz and his allies would allow in his amendment would allow a private market to co-exist with a heavily regulated and subsidized federal insurance market,” he said. “This is not ideal by any means, but it would, perhaps, allow innovation, lower costs, a variety of product offerings to exist in many states.”


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