Obamacare’s critics promised the law would send insurance premiums skyrocketing. They were wrong.
Or, if they’re not wrong, they’re at least not right yet.
Nearly 20 states have released preliminary information about premiums for insurance policies sold on their insurance exchanges, and the nightmare scenarios have not come to pass. In most of those states, the average increase across all exchange plans is in the single digits.
According to a PricewaterhouseCoopers analysis of 18 states’ initial filings, 10 states will see average premium increases of less than 10 percent—nominal hikes in line with the standard increases that have happened every year with or without Obamacare.
The outliers so far are Indiana, with an average increase of 15 percent, and Rhode Island, where the average premium will fall by about 1 percent.
Initial rates could still change; several states have the power to review proposed increases and bargain for a better deal. But the early look at states’ 2015 rates helps shed some light on whether Obamacare’s second year will bring steep cost hikes.
There are wild variations among different insurance plans. In Oregon alone, one plan wants to cut its premiums by 21 percent, while another wants to raise its rates by 28 percent. The extremes make for easy talking points (“Look how much premiums are going up!” “No, they’re going down!”), but they don’t reflect the experience most people will have when it’s time to pony up for plans: The average Oregon insurance premium will rise by 2.2 percent.
Larry Levitt, vice president for special initiatives at the Kaiser Family Foundation, said he’s surprised by the variation in proposed changes but that on average, premiums are working out to about what he expected: hikes of 7 percent to 8 percent in most places.
Premiums go up every year, and Levitt said increases of about 8 percent were to be expected based on rising medical spending and adjustments based on the first year of enrollment.
Insurers had to set their 2014 premiums based on their best guesses about who would sign up, and they don’t have much more information as they head into 2015.
“Insurers were flying pretty blind when they put together their 2014 premiums and, frankly, they’re still flying pretty blind,” Levitt said.
Because so many of Obamacare’s 2014 enrollees signed up at the very end of the enrollment window, they haven’t filed a ton of medical claims for insurers to work from as they try to figure out how much their new customers will cost them.
That helps explain some of the biggest changes in 2015 premiums—big cuts are most likely from insurers that were especially cautious about 2014 and ended up doing better than they expected, while big increases are most likely from plans that thought they’d end up with healthier customers than they did.
An influx of new insurers is also helping to keep premium increases in check, according to health care analysts. Major insurers, including UnitedHealthcare, are entering more states’ exchanges next year after sitting on the sidelines for 2014.
What We're Following See More »
Evan McMullin came out on top in a Emerson College poll of Utah with 31% of the vote. Donald Trump came in second with 27%, while Hillary Clinton took third with 24%. Gary Johnson received 5% of the vote in the survey.
A new Quinnipiac University poll finds Hillary Clinton leading Donald Trump by seven percentage points, 47%-40%. Trump’s “lead among men and white voters all but” vanished from the university’s early October poll. A new PPRI/Brookings survey shows a much bigger lead, with Clinton up 51%-36%. And an IBD/TIPP poll leans the other way, showing a virtual dead heat, with Trump taking 41% of the vote to Clinton’s 40% in a four-way matchup.
During a state visit to China, Philippine President Rodrigo Duterte "declared an end to his country’s strategic alignment with the United States and pledged cooperation with Beijing." Duterte told Chinese President Xi Jinping that he's "realigned myself in your ideological flow and maybe I will also go to Russia to talk to Putin and tell him that there are three of us against the world—China, Philippines, and Russia. It’s the only way.”
Reports say that Orrin Hatch, who in 2012 declared that he would retire at the end of his term, is considering going back on that pledge to run for an eighth term. Hatch, who is the longest serving Republican in the Senate, is unlikely to make any official declaration until after this election cycle is completed.