This is not the rate revision Obamacare supporters are hoping for: Blue Cross and Blue Shield of North Carolina, the state’s largest insurer, has modified the request it made to raise its 2016 premiums by an average of 26 percent—but it’s modified it upwards, to an eye-watering 34.6 percent.
Insurers across the country are currently going through the process of setting the premiums they will charge customers in 2016. They are supposed to estimate how much they need to charge based on how expensive (read: sick) their customer base is, and then they submit their estimate to state regulators, who have the power to approve it or, if they think the insurer math doesn’t add up, lower it. So far things haven’t looked great for the Obama Administration, as several insurers have requested quite hefty increases. In Oregon, not only were requests approved, but the regulator even told plans that did not ask for a hike to raise their premiums. But supporters of the ACA hope that regulators will overall deny the worst hikes, and it’s too soon to tell exactly how it will all shake out.
The news coming out of North Carolina, however, won’t help the Administration’s case. The NYT:
Blue Cross vice president Patrick Getzen says the program has not met expectations that healthier customers would enroll in the second year and that costs would level out after people who avoided doctors for years got treatment.
“Based on our data, neither expectation is proving true. Our claims and expenses are higher than our premiums and we need to take steps now to protect the sustainability of plans for our customer over the long-term,” Getzen said.
How badly you think this process will end depends on whether you think insurers really need the increases they’re asking for. The Obama Administration hopes state regulators will decide that the companies are overplaying their hands, but in at least one case a local commissioner rebuffed federal involvement in the process. When a federal official sent a letter to regulators outlining the reasons why requests should be scaled back, Montana’s Democratic commissioner “said the letter…was interesting, but ‘did not point to any new information that would impact how state insurance departments regulate their health insurance markets.'”
Time will tell, but regardless of how this process works out, we shouldn’t forget that U.S. health care is and remains broken—large ACA rate hikes or not.