Obamacare, the disaster that keeps on giving
I started writing this post before I checked the mail today.
Needing a break from the computer screen, I wandered out to the mailbox to find an “OPEN IMMEDIATELY, THE APOCALYPSE IS NIGH” envelope from my health insurance provider, tucked between the junk mail and a cooking magazine. Sure enough, it was a cancellation notice. Now, I too am a victim of Obamacare’s reign of insurance premium of terror.
Not to worry though. I can pay 20% more for less coverage and a deductible increase from $500 to $3250.
But my story is small potatoes compared to many families who are forced to watch in horror as their health insurance premiums triple and their deductibles multiply faster than rabbits.
The Obama administration acknowledged Monday that consumers would see health insurance premium increases across the board in 2016. They claim the average premium increases clocks in at 7.5%, though I have no idea where they’re getting these numbers. Don’t want to pay more? Then go back to the exchanges and shop around. You might pay less, but you’ll also have fewer benefits and higher deductibles.
The Wall Street Journal reports:
Federal officials said Monday that the price of the second-lowest-cost midrange “silver plan”—a key metric for premiums around the country—will increase by 7.5% on average across the three-dozen states that rely on Washington to administer the health law for them.
And 60% of enrollees—across 30 of the largest markets in the U.S.—will see the average rate for that benchmark plan rise by 6.3%, according to a Health and Human Services report on premium data that hasn’t yet been made fully public.
The higher premiums are likely to intensify Republicans’ claims that the health law isn’t holding down costs. The Obama administration is urging customers to go back online during open enrollment, which begins Nov. 1, and shop around to see if they can limit the impact of the cost increases.
“For most consumers, premium increases for 2016 are in the single digits and they will be able to find plans for less than $100 a month,” said Kevin Counihan, CEO of the health-insurance marketplaces.
Less than $100 a month? I’ll have whatever that guy’s smoking.
Insurers, who have priced plans for 2016 in part based on what they experienced in 2015, also faced higher costs in part due to rising prescription-drug prices, and they saw lower-than-expected payouts from a federal program that aims to offset carriers’ risk by providing funds to companies with costlier, sicker consumers.
“7.5% is lower than forecast in the spring, when we were hearing what rate increases would be like,” said Cheryl Fish-Parcham, director of the private insurance program at Families USA, a group that advocates for the health law. “It shows the rate review process has worked in many states.”
Averages don’t reflect what individual consumers will see, and premium amounts vary across the country. Some enrollees may see significantly higher or more modest rate increases.
State insurance regulators around the country have largely approved all or most of the hefty premium increases sought by the largest health plans for 2016. Some have jumped by double digits: On average, premiums will rise in 2016 for the second lowest-cost silver plan by 31.5% in Alaska and 22.9% in Oregon, according to the report. Oklahoma will see a 35.7% hike.
Adding fuel to the Obamacare dumpster fire are the estimated 710,000 people who received a health insurance subsidy, but didn’t file a tax return for 2014 nor did they request an extension. Those folks? They’ll lose their subsidy and be forced to pay the full premium price — a price most can’t afford.
The New York Times reported Sunday:
Erin M. Lackey, 41, of Jacksonville, Vt., was one of many people who received letters from the I.R.S. saying they were at risk of losing their tax credits.
Her mother, Ruth J. O’Hearn, a nurse who helps her daughter with insurance matters, described her own reaction.
“At first, I was angry,” Ms. O’Hearn said. “Then I felt frustration and fear. You can’t be without insurance. Without the subsidy, health insurance would be unaffordable. Without insurance, the cost of medical care would be unaffordable.”
Yet another 760,000 received subsidies, but failed to complete the proper form saying the I.R.S. Form 8962 was “daunting.”
“The premium tax credit form, the dreaded 8962, is really hard,” said Eileen P. Duggan, a piano teacher and freelance writer in Maplewood, Mo., outside St. Louis, who filed the form with her tax return. “It’s enough to make you cry, that form. It was almost impossible to figure out.”
The federal government provides subsidies in the form of tax credits, which cover about 70 percent of premiums, on average. The I.R.S. commissioner, John A. Koskinen, said 97 percent of people who received such assistance claimed it in advance, before filing their taxes. The amount of the subsidy is based in part on how much income the recipient expects to have in the coming year.
Two-thirds of people using the federal exchange have incomes less than twice the poverty level (less than $23,540 a year for an individual).
I shudder to think what happens to premiums when the 1.4 million who either failed to file proper IRS paperwork or file their 2014 taxes lose their subsidies, then stop paying for health insurance they’re unable to afford. Someone will have to make up the difference, and I imagine that someone will be me.
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