Earlier this year, when insurers across the country put in requests for big rate increases for their ACA plans, some hoped that state regulators, who have the power to review requests, would not approve the biggest price hikes. An early sign from Oregon was not encouraging—and now an article in the WSJ confirms the bad news:
Kentucky Insurance Commissioner Sharon Clark approved the 25.1% increase requested by the Kentucky Health Cooperative, the largest insurer on the state’s insurance exchange […]Oregon’s Laura Cali allowed an average 25.6% increase for Moda Health Plan Inc., the biggest plan on that state’s exchange. In Ohio, Lt. Gov. Mary Taylor approved a 14.5% increase from Medical Mutual. In Michigan, BlueCross BlueShield won approval for the average 11.4% increase from insurance director Patrick McPharlin.In Idaho, insurance director Dean Cameron said that an average 23% increase by Blue Cross of Idaho Health Service Inc., was disappointing but “not unreasonable” and that he didn’t have the power to stop it.
The article is quick to point out that not all states are seeing high increases; indeed, some states are only seeing small upticks. But the trend is showing in enough states that it should worry ACA supporters. They might be quick to point out that consumers won’t have to bear the full brunt of these increases because federal subsidies make the care more affordable. But that response reveals a classic—and dangerous—band-aid approach to policy. Pumping more money into an unsustainable system by subsidizing consumption might make things somewhat better for consumers in the short term, but it’s an approach that yields diminishing returns as the system begins to groan under its own weight.