Because of Obamacare, some Oklahomans are going to pay a lot more – in some cases 50-plus percent more – for their health insurance in the upcoming year.
Blue Cross Blue Shield of Oklahoma has asked for rate increases as high as 51 percent.
And those increases are being sought all over the country. Blue Cross Blue Shield of Texas lost $592 million last year and $416 million the year before.
They want a premium increase of nearly 60 percent.
North Carolina’s biggest insurer wants an increase of almost 19 percent. It’s 44 percent in Vermont.
According to the American Academy of Actuaries, the major drivers of 2017 premium changes are growing health care costs, the elimination of reinsurance program funds, changes in risk pool composition and changes in provider networks.
Most of these factors are affected by Obamacare.
The Oklahoma Insurance Department does not have statutory authority to approve or deny rate increases filed by insurers on the federal health insurance exchange. Oklahoma, along with Texas, Missouri, Alabama and Wyoming, is a direct enforcement state – meaning it has no authority to enforce provisions of the Affordable Care Act (Obamacare).
“We know consumers enrolled in ACA health plans are about to experience another round of rate increases in 2017,” said Oklahoma Insurance Commissioner Doak. “These rates will be evaluated and approved by the Centers for Medicare and Medicaid Services (CMS). We are aware of the need to balance consumer needs with insurers’ requirements to sustain their participation in the marketplace. CMS must consider these elements as they review and approve 2017 rates.”
State Question 756, passed in 2010, amended the Oklahoma Constitution to prohibit laws which compel individuals, employers and providers to participate in health care systems. Because of that legislative change, insurers offering products on the exchange were required to submit rate filing justifications to CMS by May 11. The initial proposed rate change information is now available at https://ratereview.healthcare.gov.
CMS officials will review the proposed rate changes and determine if they are justified. The rates will be finalized by August 23.
Federal officials claim that Obamacare is saving money for Oklahomans. Federal authorities cannot force companies to roll back increases. The answer for federal authorities is to increase welfare under Obamacare.
“Consumers in Oklahoma will continue to have affordable coverage options in 2017 and will benefit from a new issuer entering the Marketplace,” said Jonathan Gold, press secretary at the U.S. Department of Health and Human Services. “Last year, the average monthly premium for people with Marketplace coverage getting tax credits decreased $9, from $89 to $80 per month, despite headlines suggesting double digit increases. People in Oklahoma understand how the Marketplace works, and they know that they can shop around and find coverage that fits their needs and budget.
“In fact, last year more than 32 percent of them did exactly that by switching plans to save money. In addition, the vast majority of consumers in Oklahoma qualify for tax credits that reduce the cost of coverage below the sticker price.”
The federal filings show an average rate increase in Oklahoma but those are requests until approved.
Consumers in Oklahoma have options. Aetna is entering the state’s Marketplace, allowing consumers to access tax credits for Aetna the first time, while United is exiting.
Gold said Obamacare “offers a different type of coverage than previously existed.”
“Unsurprisingly, some issuers are adapting faster than others to this new market,” he said.
Most people receive tax credits and can buy a plan for less than $75 per month.
He said 84 percent of Marketplace consumers in Oklahoma receive tax credits, which are designed to protect consumers from premium increases and help make coverage affordable.
Tax credits increase if the cost of the second lowest-cost silver, or benchmark, plan goes up. So if all premiums in a market go up by similar amounts, 84 percent of Marketplace consumers in that market will not necessarily pay more because their tax credits will go up to compensate. Average rate increases reported with the preliminary rate filings do not account for tax credits.
For 2016 coverage, 76 percent of customers in Oklahoma had the option of selecting a plan with a premium of $75 or less per month after tax credits.
The costs have risen because policies must cover pre-existing conditions and include maternity care, prescription drugs and other provisions.
Since major provisions of the Affordable Care Act went into effect, Oklahoma’s uninsured rate fell from 23 percent in 2013 to 17 percent in 2015 for non-elderly residents, according to new data released just last week.
“Health insurance is clearly something people in Oklahoma like, want and need: 145,329 people signed up for 2016 coverage,” Gold said.
For the half of Americans who obtain health insurance through an employer, premiums for family coverage grew by an average of 5 percent per year from 2010 to 2015 – compared with about 8 percent per year from 2000 to 2010. Premiums grew at an even slower 4.2 percent rate in 2015. If premium growth since 2010 had matched the average growth rate over the prior ten years, the average family premium would have been almost $2,600 higher in 2015.