The Eye Popping 2016 Obamacare Rate Increases Are Out

[taterpeeler]

rates have NOT gone up..... see, us subsidy players understand the end game.... that is 2nd lowest cost silver with minor to no income change equates to zero increase... this, as i have said before, is how aca was crafted. The feds could care less about those that make 400%... you fat rich republicians need to just go along...

 

[yorkriver1]

rates have NOT gone up..... see, us subsidy players understand the end game.... that is 2nd lowest cost silver with minor to no income change equates to zero increase... this, as i have said before, is how aca was crafted. The feds could care less about those that make 400%... you fat rich republicians need to just go along...

I am pretty agnostic now about "sides", my side is me making a living. I do want to report that the recent POTUS messaging is still saying that healthcare costs are going down. What are they measuring? Not insurance carriers loss ratios, I guess.

 

[somarco]

want to report that the recent POTUS messaging is still saying that healthcare costs are going down

You were expecting the truth?

He also claims unemployment is down.

But why are 92M people no longer in the workforce?

And why are 48M on food stamps?

And why is the 30 hour work week now the norm?

And in case you have missed it, ISIS is the JV team and they are on the run. Illegal aliens are not a problem. Sending jobs overseas is good for the economy. Greenhouse emissions are down. And the stimulus plan worked.

 

[tonyisme]

Got the agent letter bcbsaz rates for grandfathered plans going up 18%
Plenty of crack pipe smoking going on in DC... we paying their insurance via our taxes..why would they tell the truth?
I'm losing my plan at the end of this year. I received that notice also the plan I pay for out of my pocket.
I got another notice than I'm supposed to contact my clients to help them migrate...from the plan we sold them after 3/2010
They losing theirs too.....

 

[AllenChicago]

July 16, 2015

Here's an easy read article that explains the two biggest reasons why 2016 premium increases will be so large, and why 2017 will bring additional hefty premium increases.

(I normally just post an article's URL, but the WSJ often times wants you to send them money in order to read their content.)

Full Text of Wall Street Journal Article:

By
Stephen T. Parente

July 16, 2015 6:54 p.m. ET

22 COMMENTS

Americans who purchase health insurance on the Affordable Care Act's exchanges should buckle up. Within the month, state regulators will begin approving premium hikes for plans sold in every state. The Centers for Medicare and Medicaid Services (CMS) has already released the premium increases that health insurers have requested for their 2016 plans. By law, insurers must receive regulatory approval for any increase more than 10%—and more than 10% is what many of them want.

The numbers are staggering. According to the rate requests posted on Healthcare.gov, nearly every state has multiple plans that are facing a more than 10% premium increase. Many plans—including some offered by state-market leaders—could see hikes of more than 30%, 40% or even 50%. Though most of these requests have not been approved, nor have all of the rate hikes that are less than 10% been unveiled, it is undeniable that millions of Americans are facing double-digit premium increases for health insurance next year.

For the first time since the law went into effect three years ago, insurers are basing their rate-hike requests on more than a year of data. For 2014 plans, they had to make educated guesses on how to price their never-before-sold ACA-compliant plans. For 2015 estimates, insurers had about six months of information to work with, and the final average premium increase was 5.4%. Now that insurers have a more complete picture, it is clear that costs are increasing much faster than anticipated.

It's only going to get worse after 2016, as I've written in these pages, when two de facto bailouts for insurance companies expire. Through "risk corridors," taxpayers are on the hook for patients who spend more on health care than insurers predicted. Through "reinsurance," taxpayers are heavily subsidizing the most-expensive patients—those who make more than $70,000 in claims in 2015. Thanks to these two programs, insurance companies are able to artificially lower their premiums for consumers—by between 10%-15% in 2014, according to CMS—while charging the taxpayer for their losses. Reinsurance alone cost taxpayers $7.9 billion in 2014.

But consumers will pick up that tab once these programs disappear at the end of 2016. Health insurers are aware of this fact, and it's in their interest to avoid the negative attention—and angry customers—that dramatic premium increases will cause. They thus have an incentive to spread out the coming hikes over both 2016 and 2017, rather than confine them to next year.

Using the latest health-insurance-exchange enrollment data and a microsimulation model funded in part by the Health and Human Services Department, I estimated the premium increases that could occur as a result of the expiration of risk corridors and reinsurance. My model also assumes that 2017's big premium increases will be spread out over both 2016 and 2017 rates.

My research shows that the average 2016 family plan could experience premium increases of 11.2%, compared with 8% hikes for individual plans. The relatively cheap bronze plans, which cover 60% of a consumer's health-care costs, could see the highest jumps—16.6% and 11.5%, respectively. Individual silver plans could see a relatively low increase—3.1%—but families won't be so lucky, potentially paying 8.4% more.

That won't stay the same in 2017, however, when individual silver-plan premiums could rise by an average of 12.1%, surpassing a 9.2% increase for families. Across every type of health-care plan—bronze, silver, gold, platinum and catastrophic—families could be looking at average increases of 7.3%, compared with 11% premium hikes for individual plan holders.

To put these numbers in context: For consumers with silver plans, which account for about two-thirds of the ACA market, the average individual could see annual premiums rise to $3,700 over the next year and a half from $3,200. A family could expect an increase to $15,400 from $13,000 over the same period.

After 2017, most ACA-compliant plans will likely fall into a pattern of annual premium increases of between 3%-6%, which will persist for the next decade and likely beyond. By 2023, I estimate that the average family plan could be 61% more expensive than it is in 2015, with individual plans only one or two percentage points behind. These increases are so high that direct taxpayer subsidies to consumers are unlikely to keep up. So the cost, both financially and politically, will become increasingly intolerable.

Policy makers should keep this in mind in the wake of the Supreme Court's decision upholding federal subsidies in King v. Burwell . Despite the court's decision, and the president's claims to the contrary, the Affordable Care Act remains unaffordable for too many Americans—and that will only get worse in the coming years.

Mr. Parente, a professor of health finance, is an associate dean at the Carlson School of Management at the University of Minnesota.

Source URL: ObamaCare

-end

 

[somarco]

The solution is to put everyone on a subsidized plan, increase the subsidies in direct proportion to the premium increases.

No problem.

 

[RWKAgency]

Based on my experience of working a health reform market since 1993, I would say his renewal increase estimates are a bit low. Once they fully figure out their utilization cost deficit, it will be closer to 20%.
We have also been saying this since 2009. We told them over and over they weren't properly rating on utilization costs. I know, I know...it is technically illegal to base a renewal rate on utilization but who's kidding who.
We haven't seen the ceiling yet on ACA plan premiums, not even close. In NJ, the first state foolish enough to try this nonsense we went from a $69 HMO with a $10 copay for both primary and specialist to paying nearly $500 a month for a $30/$50 copay on an EPO with a horribly inadequate network.
Nope, folks have no idea what is coming next.

 

[FLM2]

July 16, 2015


After 2017, most ACA-compliant plans will likely fall into a pattern of annual premium increases of between 3%-6%, which will persist for the next decade and likely beyond. By 2023, I estimate that the average family plan could be 61% more expensive than it is in 2015, with individual plans only one or two percentage points behind. These increases are so high that direct taxpayer subsidies to consumers are unlikely to keep up. So the cost, both financially and politically, will become increasingly intolerable.

Policy makers should keep this in mind in the wake of the Supreme Court's decision upholding federal subsidies in King v. Burwell . Despite the court's decision, and the president's claims to the contrary, the Affordable Care Act remains unaffordable for too many Americans—and that will only get worse in the coming years.

Mr. Parente, a professor of health finance, is an associate dean at the Carlson School of Management at the University of Minnesota.

Source URL: ObamaCare

-end

Interesting article.

Without getting into the details, and only looking at it from the agents perspective, it seems to me that the best way to evaluate a book of business (assuming commissions remain in the current neighborhood for the next two years) is to roll your book to get clients lower premiums (and a new FYC) in both 2016 and 2017 and then figure there won't be much movement after that.

It would also seem like once rates stabilize there will be less incentive for carriers to continue to pay FYC so having your book of business placed under the prior commission rules will be important (although a declining source of revenue).

So there is the scenario for me-two more years of FYC, renewal commissions after that for existing business, and ride it out for as long as these policies stay on the books while building a different revenue stream (Medicare is my choice).

 

[RWKAgency]

Interesting article.

Without getting into the details, and only looking at it from the agents perspective, it seems to me that the best way to evaluate a book of business (assuming commissions remain in the current neighborhood for the next two years) is to roll your book to get clients lower premiums (and a new FYC) in both 2016 and 2017 and then figure there won't be much movement after that.

It would also seem like once rates stabilize there will be less incentive for carriers to continue to pay FYC so having your book of business placed under the prior commission rules will be important (although a declining source of revenue).

So there is the scenario for me-two more years of FYC, renewal commissions after that for existing business, and ride it out for as long as these policies stay on the books while building a different revenue stream (Medicare is my choice).

I couldn't agree more. So much so that I started planting my Medicare flag 5 years ago so there is community awareness that my agency is our town's "go-to" source for Medicare. I am going to write the ACA plans this year just as a nice little piece of gravy and ride it while it lasts.
Medicare is my bread and butter and it is pretty good.

 

[Yagents]

Based on my experience of working a health reform market since 1993, I would say his renewal increase estimates are a bit low. Once they fully figure out their utilization cost deficit, it will be closer to 20%.
We have also been saying this since 2009. We told them over and over they weren't properly rating on utilization costs. I know, I know...it is technically illegal to base a renewal rate on utilization but who's kidding who.
We haven't seen the ceiling yet on ACA plan premiums, not even close. In NJ, the first state foolish enough to try this nonsense we went from a $69 HMO with a $10 copay for both primary and specialist to paying nearly $500 a month for a $30/$50 copay on an EPO with a horribly inadequate network.
Nope, folks have no idea what is coming next.

I had a self employed buddy in Sarasota FL back in 2006, whose HSA 5800 family of 4 deductible at goldenrule was $300/mo . He moved to NJ, and his individual rates were upwards of $1100 for IFP. It was cheaper for him to do a small group plan for like $900/mo. The ACA market might look like this in a couple years, where group is cheaper than IFP, and people seek out employers with group plans, and more employers implement them.