Obamacare Insurance Premium Increases On The Horizon

Obamacare health coverage could become significantly more expensive in 2016, according to filings with state regulators submitted by major insurance companies.

Officially known as the Affordable Care Act, Obamacare is the president’s signature legislative achievement.

The premium increase in New Mexico, for example, could be as high as 50 percent, more than 30 percent in Tennessee and Maryland, and about 25 percent in Oregon, The Wall Street Journal reported. Other states appear to be facing increases in the 10 percent range, all of which are subject, however, to approval by government officials by fall 2015. Even Democrats who strongly pushed for Obamacare have acknowledged the law needs some changes to avoid premium sticker shock.

“Major insurers in some states are proposing hefty rate boosts for plans sold under the federal health law, setting the stage for an intense debate this summer over the law’s impact… All of them cite high medical costs incurred by people newly enrolled under the Affordable Care Act. Insurers say their proposed rates reflect the revenue they need to pay claims, now that they have had time to analyze their experience with the law’s requirement that they offer the same rates to everyone—regardless of medical history,” the Journal explained.

“Now that insurers have had more time to look at the claims coming in from those enrolling from Obamacare, they’re finding that the pool of customers is older and sicker than originally projected, driving up medical costs. Meanwhile, federal help isn’t what they anticipate,” the Washington Examiner similarly asserted.

As previously detailed by many media outlets, lots of consumers have already encountered sharply higher premiums, co-pays, and deductibles, and getting locked out of existing provider networks — even through employer-based coverage and not just on the individual market — as a result of the one-size-fits-all Obamacare law. In addition to complicated structural issues, premiums have increased because regulations require consumers to pay for coverage that is nonetheless inappropriate for their age or gender.

Obamacare also made less expensive, high-deductible and/or so-called cafeteria plans illegal under healthcare reform.

Democrats have acknowledged, according to an AP report, that Obamacare places a burden on ordinary Americans. “After paying premiums, many low- and middle-income patients still face high costs when trying to use their coverage. There’s growing concern that the value of a health insurance card is being eaten away by rising deductibles, the amount of actual medical costs that patients pay each year before coverage kicks in.”

Said Congressman Jim McDermott (D-Wash.) about the situation,”We’ve got some 17 million more people covered… but they can’t access the care they seem to be entitled to it. It costs too much to use the care. That’s the deceptive part about it.”

Across the political and ideological spectrum, many observers agree that there was too much logrolling (aka crony capitalism or corporate welfare) among Big Government, Big Insurance, and Big Pharma when Obamacare was crafted by “architects” such as Jonathan Gruber and other consultants and lobbyists.

President Obama originally promised that healthcare reform would lower premiums for a typical family by up to $2,500 a year.

A segment of the population who purchase Obamacare insurance on government exchanges qualify for subsidized coverage to help tamp down the present or future cost of monthly Obamacare premiums. “For anyone who doesn’t get subsidies, these increases would deliver a shock. The vast majority who do get subsidies will be shielded from higher premiums because their contribution is a fixed percentage of income, leaving the government to pay the difference,” Investors’s Business Daily declared.

But, in general, that only holds true for a consumer whose income remains stagnant or is entirely predictable from year to year. For other workers whose income fluctuates upward, they might wind up on the hook for subsidy repayments to the tax man when they file their federal return. Moreover, the constitutionality of the subsidies offered through HealthCare.gov, as opposed to a state exchange, is currently before the Supreme Court in King v. Burwell with a decision expected next month.

As you may recall, after a lot of behind-the-scenes arm-twisting (which included such incentives as the “cornhusker kickback” and the “Louisiana purchase“), Obamacare passed the U.S. Senate on Christmas Eve, 2009, and the U.S. House on March 21, 2010, on a straight party-line vote when both federal legislative chambers were controlled by Democrats. It officially became the law of the land on March 23, 2010 with President Obama’s signed approval, following a fast-tracked, parliamentary maneuver called reconciliation. Under Article 1, Section 7, of the U.S. Constitution, all bills for raising government revenue are supposed to originate in the House rather than the Senate, however. No Republican in Congress voted for Obamacare. Thirty of the 60 Senate Democrats who voted for Obamacare are no longer in office as the new Congressional term began in January 2015 with both chambers under GOP control.

Obamacare administrative overhead costs are also expected to explode by $270 billion over the next decade, The Hill reported.

The U.S. Supreme Court upheld the constitutionality of the Obamacare individual mandate on a 5-4 ruling in June 2012, with Chief Justice John Roberts supposedly switching his vote after initially joining with the four conservative justices to strike it down.

[Photo by Joe Raedle/Getty Images News]