I have heard a number of people (including some on the SD message boards) complain about how the passage of the ACA increased their health insurance premiums a great amount. I did a bit of research on this, and found that for individual policies premiums actually went down since Obamacare, and that employer-subsidized group insurance premiums increased at the same or slower rate than prior to passage of Obamacare.
So who are the people whose rates have gone up so sharply? Why have their rates gone up?
The lower premiums usually depend on being eligible for the federal Premium Tax Credit. For a family of four, this means the family income is less than $95,400; for a family of two, less than $62,920; for a single person, less than $46,680.
This CNN article describes some of the reasons for the sudden sharp increase.
My wife and I had a policy that was grandfathered in from Humana. It cost us $160/month for what was basically catastrophic coverage with a $7000 deductible per person, individually separated. After that it pretty much paid anything. That plan is being phased out as of the end of this month.
I signed up under Obamacare for the cheapest plan available to me. It will now cost us $400/month with a $15,000 deductible for the worst plan that they have. True, it will cover some things that my previous catastrophic plan didn’t cover, but we don’t run to the damn doctor for every sniffle, and in fact, haven’t been other than for checkups in many, many years. We’re healthy people, relatively speaking. No meds, no problems, and now we’re paying much more for something we didn’t want.
I do know people that have it better now. They are super sick people with lots of medical costs that somehow pay less than us. I don’t get it. We clean houses for a living and are not exactly making huge incomes. I do know that lots of people lie as to their income to get subsidies, but that’s now how we roll. So, my wife and I are such people, and it sucks.
I had a very nice (what would be considered “Platinum”) plan that I thought was outrageously priced at about $800/month before ACA. I now have a plan that is one step down (Gold) for $1,050/month. Self-employed folks like me got screwed, but everyone knew that would happen, so no surprise. I do not qualify for a subsidy.
Young people and people whose health insurance didn’t really cover anything saw their premiums go up.
Other than that, it was just the regular growth in premiums. 2009 was 7 years ago, and if you assume health insurance costs go up by 10% a year, that means they should be double what they were in 2009.
The ACA didn’t do much to slow medical inflation, which is the real problem. If insurance rates double every 5-10 years (meaning they grow by 7-15% a year, which is reasonable. Some years they grow by 40%) that means in 15 years insurance could be 8x more expensive than it is now.
The system is unsustainable. Irrelevant of whether the ACA is law or not, we are probably looking at a world where in the 2030s it will cost $1500/month for a person in their 30s to buy a plan with a $10,000 deductible.
The exchanges weren’t up and running until 2013, so I’d start the clock there, not at 2009 when the bill was passed. That latter date isn’t so meaningful.
I am a healthy single male 57 year old with a ACA mandated Carefirst Bronze plan that has a 6500 deductible and now costs 550 a month (was 370 a month in 2015) . I have no choice to roll the dice as I might have pre ACA .I must be enrolled or y a tax penalty. I do not (personally) consider that I am getting 6600 worth of value in this plan relative to the actuarial risks involved for what is effectively a new forced tax.
No but some of the consumer protections went online in 2010, plus insurers were raising rates before the full law came out in preparation of it. I think my insurer at work raised the rates 40% in 2013.
My (at the time) fiancee, now wife’s health insurance premiums went up about 3-fold. The insurance she had before didn’t cover pregnancy, but that was no longer allowed. It turns out if you’re a 30-something woman, health costs due to pregnancy are a pretty large part of your expected health costs.
Now, I think you can make a good point that health insurance for women of childbearing age should cover pregnancy. But I think you can also make a good point that people should be able to choose. Getting pregnant is not like getting cancer, or being in a car crash. It isn’t something that just happens, it’s something that you can prevent, with a high degree of reliability. The chances of her getting pregnant were vastly lower than whatever the average for women in her demographic were, and we had a backup plan for the small chance anyway (get married at the courthouse before our wedding date, and my company’s health insurance would cover her).
I can see lots of people in similar situations being annoyed that their premiums went up. We got married shortly after, but if we hadn’t, the extra cost would have been several thousand dollars a year.
Also, insurance rates generally went up on healthy young people. Because the law limits the ratio insurers can charge old people over young people to 3:1 (which is lower than the ratio of the real expected cost of insuring those people), younger people are paying more, and older people are (generally) paying less than the real cost of insuring them. Given that older people are also wealthier than younger people, you can see why many younger people might be upset at this.
I’m self employed. Before the ACA took effect, I had a plan that had very good coverage and was affordable. After ACA, I tried to find a comparable plan, but it did not exist. What I could find and eventually purchased was about triple the cost with higher deductibles and shitty prescription coverage.
I used to go to my PCP for a yearly check up and blood work. Fuck that now. I have coverage for when I’m dying, otherwise I’ve opted out of our crappy healthcare system.
No where in the US can insurers arbitrarily raise rates, but unlike auto and home insurance, rates are not required to be pre-approved for health insurance in the state. I believe CA uses Actuarial Justification method for health insurance rate setting - meaning that the companies actuaries need to support the rates they charge using guidance from the NAIC.
My premium for a family plan went up 17% for next year. I shopped around to see if there was a better deal, but in the end decided to stick with our current plan. There are cheaper plans, but with much worse coverage. I’ll just have to eat the extra cost.
Pre-ACA, it was relatively easy for healthy people to get cheap coverage for basic problems. If you rarely went to the doctor and didn’t have chronic problems, the insurance companies competed to sign you up. But if you had problems that were chronic (like diabetes) or serious (like cancer), you would struggle to find coverage at a reasonable price, if you could get coverage at all. Carriers could also drop you or spike your rates if you were no longer healthy and started using a lot of benefits.
The price hikes you see with ACA is reflecting the more realistic cost of insurance over your lifetime. You may be young and healthy now, but in your 50’s and 60’s you’ll start having health issues that just get worse and more expensive as you get older. Most people don’t need health insurance until they get sick, but sick people pay a lot for health insurance.
The ACA was an effort to get young, healthy people to sign up so that the cost of coverage when they got older would stay lower. The healthy people signing up today are subsidizing the coverage of the sick people. That also means that healthy people will subsidize your coverage when you get sick. If you get seriously sick without the ACA protection, it is very likely you couldn’t afford the premiums and could end up bankrupt trying to pay for treatment.
That is a valiant goal, but I think that the balance has come out too hard on the young.
Because another way of framing it is that young poor people are subsidizing old rich people. Which seems rather unfair. Those old people who are sick and require expensive health care are way richer than the young people who don’t need much.
If we had some kind of single-payer system, or even a more income-tested/subsidized system, this would be much less of a problem, because the taxes that support it would generally come from richer people (as most taxes do).
Ultimately, this comes down to a societal decision on how much is reasonable to spend keeping old sick people alive longer. It’s not an easy decision, since of course we don’t want people who we could keep alive for a reasonable cost to die prematurely. On the other hand, we also don’t want to funnel absurd amounts of money into the last few months of a very sick person’s life (which is what we tend to do now). And this problem is going to get a lot worse before it gets better, due to demographic trends, unless we run into some major advances in treatment.