Affordable Care Act Brings Unaffordable Premium Hikes

Pennsylvania insurance companies are asking for dramatic premium hikes on exchange plans. Highmark underestimated the cost of care for individuals on the exchange and is now requesting a 23% to 39% percent premium hike for 2016 plans. In addition, the insurer expects a $155 million bailout from the Affordable Care Act’s risk management programs.

Highmark isn’t an anomaly in Pennsylvania. Time Insurance Co. is seeking a 61% increase. Gesinger is seeking premium hikes from 40% to 58%. And First Priority is requesting a 21% and 35% hike. Elsewhere, Health Care Service Corp. in New Mexico is requesting an average hike of 51.6%, and BlueCross BlueShield of Tennessee is looking for a 36.3% increase.

It’s undeniable that the ACA is not only failing to make health insurance more affordable, but is making it more expensive.  

On top of premium hikes, exchange customers face higher deductibles. A Families USA analysis shows 43% of those purchasing exchange plans had deductibles of $1,500 per person, and nearly a quarter had deductibles double that amount. This despite cost-sharing subsidies claimed by many lower-income ObamaCare enrollees.

And let’s not forget that exchange premiums are artificially suppressed thanks to federal subsidies that average $277 per Pennsylvanian.

A decision in favor of the plaintiffs in the King vs Burwell US Supreme Court case could reverse the trend of rising premiums and deductibles. If the court rules that subsidies on federal exchanges are illegal, Congress has a golden opportunity to bring consumers relief. (Pennsylvania currently utilizes a federal exchange). 

Should this opportunity arise, the Heritage Foundation proposes elimination of three costly Obamacare regulations: the age-rating rules, the actuarial value restrictions, and the benefit mandates. These changes would create a 45% decrease in premiums for a 21 year old Pennsylvanian and a 9% decrease in premiums for a 61 year old Pennsylvanian (based on bronze plan rates).  

Regardless of what happens in Washington this month, one thing remains clear: the Affordable Care Act has been anything but affordable.