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Obamacare Premium Spike Goes National

Californians learned earlier this month that their insurance premiums would be shooting up as a result of Obamacare. But those of us outside California shouldn’t gloat, as it looks like California was just early to the party: Insurance companies are now notifying brokers around the country that premiums are likely to go up in the coming year as they adapt to the new requirements brought on by the Affordable Care Act. As in California, the costs will fall primarily on individuals and small businesses, and as in California, they will fall disproportionately on the young. The Wall Street Journal reports:

Starting next year, the law will block insurers from refusing to sell coverage or setting premiums based on people’s health histories, and will reduce their ability to set rates based on age. That can raise coverage prices for younger, healthier consumers, while reining them in for older, sicker ones. The rules can also affect small businesses, which sometimes pay premiums tied to employees’ health status and claims history. […]

In a private presentation to brokers late last month, UnitedHealth Group Inc., the nation’s largest carrier, said premiums for some consumers buying their own plans could go up as much as 116%, and small-business rates as much as 25% to 50%. The company said the estimates were driven in part by growing medical costs not directly tied to the law. It also cited the law’s requirements that health status not affect rates and that plans include certain minimum benefits and limits to out-of-pocket charges, among other things.

As the Journal notes, there is still a good deal of doubt about these figures and what they mean for the insurance market as a whole. Some analysts believe that the reports of triple-digit rate hikes will be extremely rare, and the analysis doesn’t take into account the fact that government subsidies will be available to allow those with less money to buy insurance. Nonetheless, a general trend is emerging, and it’s becoming obvious that at the very least, Obamacare is doing little to address rising medical costs, and is likely making the problem worse.

As Obamacare celebrates its third birthday, polls show that the law is no less controversial than it was when it was first passed. It’s not hard to see why.

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