Obamacare was sold to the American public as an opportunity to save $2,500 a year for a family of four. But each family member enrolled in Covered California for 2016 can look forward to paying another $384 in Northern California and $296 in Southern California.
The Obama White House promised medical costs would plummet, because its socialist healthcare model would create lots of new competition that would drive down the evil insurance companies’ profits. But despite the U.S. Department of Labor reporting that inflation has only averaged +.1 percent over the 12 months, Covered California’s premiums are set to jump by +4 percent next year–and that is low compared to other states.
Breitbart News recently reported in “Obamacare’s Monopoly Pricing Explains Health Care Merger Mania” that the association of “American Health Insurance Plans”–the industry super-lobby–invested $102.4 million to urge the then-Democrat-controlled Congress to tweak the 2010 Obamacare legislation to allow more profitability and greater industry concentration than the prior insurance regulatory structure.
Rather than reducing U.S. healthcare expense, medical spending’s national share of GDP has risen to 17.8 percent from 16.0 percent when President Obama took office in 2009. Prescription drug spending continued to be the fastest growing health care expenditure last year, rising by 13.0 percent.
With Obamacare insurance premiums spiking faster than inflation in every state, Covered California and other state Obamacare healthcare exchanges have become honey-pots for corporate healthcare profits.
Covered California’s 4% increase is relatively small, which those in charge are citing as an example of its success, urging other states to follow its model, which allows the government to negotiate insurance prices on behalf of consumers.
Still, Covered California’s price increase is above inflation, and will vary dramatically within the state in 2016. Some county residents will get hammered; others, not so much. The wide variability in pricing will include:
Santa Cruz = +12.8 percent;
Santa Clara = +7 percent;
Alameda and San Mateo = +6 percent;
Southwest L.A. County = +2.5 percent; and
Northeast L.A. County = -.2 percent.
With a “baked-in” above-inflation rate increases for the foreseeable future, Anthem-Blue Cross just bid $54 billion to buy Cigna. The merger will create the largest healthcare insurer in California. With a combined 8.2 million enrollees and their family members, Anthem will control a stunning 40 percent of the California healthcare market.
High rates and shrinking competition explain why the S&P 500 Health Care Index, covering all the public companies in the sector, is up 305 percent since President Obama took office. The last six-and-a-half-years have seen the fastest price gains in the history of the industry, including:
United Healthcare = +375 percent;
Humana = +309 percent;
Cigna = +305 percent;
Aetna = +290 percent; and
Health Net = +224 percent.
Covered California is expected to grow from 1.3 million members this year to 1.5 million in 2016, continuing to hold the top spot for Obamacare state exchanges.
By fostering price increases above inflation and a monopolistic consolidation, however, Covered California for 2016 looks like an extremely large profit center for the healthcare insurance industry.