Health Insurers Raise Some Rates by Double Digits, Despite New Health Law

January 15, 2013

Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration's health care law was to stem the rapid rise in insurance costs for consumers. Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own, says the New York Times.

  • In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers' filings with the state for 2013.
  • These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.
  • In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders.
  • The proposed increases compare with about 4 percent for families with employer-based policies.

The double-digit requests in some states are being made despite evidence that overall health care costs appear to have slowed in recent years. PricewaterhouseCoopers estimates that costs may increase just 7.5 percent next year, well below the rate increases being sought by some insurers. But the companies counter that medical costs for some policy holders are rising much faster than the average, suggesting they are in a sicker population. Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits.

Some consumer advocates and policy experts say the insurers may be increasing rates for fear of charging too little, and they may be less afraid of having to refund some of the money than risk losing money.

Source: Reed Abelson, "Health Insurers Raise Some Rates by Double Digits, Despite New Health Law," New York Times, January 5, 2013.

 

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