Health Industry Warns O-Care Costs Set to Double

Health Industry Warns O-Care Costs Set to Double

The Obama administration pinned its hopes of a self-sustaining national health insurance structure on a high percentage of young, healthy enrollees chipping in to pay for a relatively low number of older, sick people, but it (predictably) did not turn out that way at all. Now Health and Human Services (HHS) Secretary Kathleen Sebelius wants to downplay concerns about rising premiums in the healthcare sector. Last week she told lawmakers rates would increase in 2015 but grow more slowly than in the past.

But health industry officials say instead ObamaCare-related premiums will double in some parts of the country!

This is crazy! It’s also not what we were promised. If this bothers you, make sure to spread the word! Share or tweet this article to help ensure  voters are informed before the mid-term elections.

The expected rate hikes will be announced in the coming months amid an intense election year, when control of the Senate is up for grabs. The sticker shock would likely bolster the GOP’s prospects in November and hamper ObamaCare insurance enrollment efforts in 2015.

“The increases are far less significant than what they were prior to the Affordable Care Act,” the secretary said in testimony before the House Ways and Means Committee.

Her comment baffled insurance officials, who said it runs counter to the industry’s consensus about next year.

Kathleen Sebelius

“It’s pretty shortsighted because I think everybody knows that the way the exchange has rolled out … is going to lead to higher costs,” said one senior insurance executive who requested anonymity.

The insurance official, who hails from a populous swing state, said his company expects to triple its rates next year on the ObamaCare exchange.

The hikes are expected to vary substantially by region, state and carrier.

Areas of the country with older, sicker or smaller populations are likely to be hit hardest, while others might not see substantial increases at all.

Several major companies have been bullish on the healthcare law as a growth opportunity. With investors, especially, the firms downplay the consequences of more older, sicker enrollees in the risk pool.

Much will depend on how firms are coping with the healthcare law’s raft of new fees and regulatory restrictions, according to another industry official.

Some insurers initially underpriced their policies to begin with, expecting to raise rates in the second year.

Others, especially in larger states, will continue to hold rates low in order to remain competitive.

Don’t feel bad for the insurance companies though! You can bet they will not lose out. In fact Obama now says even if the insurance companies lose, they can’t lose!

As FoxNews reported, bureaucrats pushed through a sneaky change late Friday that will ensure that if the health insurance companies fail you, the public will guarantee to bail them out:

In a sneaky and illegal maneuver after close of business Friday, the Obama administration proposed a new rule increasing bailout protection for insurance companies that sell ObamaCare  exchange plans. The rule –using taxpayer money, of course — is designed to protect the companies from losses.

It’s illegal, because no president, including Obama, has the constitutional authority to rewrite the laws. The president’s sworn duty is to “take care that laws are faithfully executed.”

The new rules substantially increase permissible profits and the percentages of revenue that insurers can spend on salaries and administration, instead of patient care.

The Affordable Care Act, as written and enacted in 2010, contains a bailout provision, Section 1342. It makes insurers whole for losses they were certain to incur by virtue of offering “affordable” plans.

Such losses were inevitable, because ObamaCare  rules make it impossible for an insurance company to offer “affordable” plans and still cover costs. The premiums have to cover a long list of mandatory benefits, as well as $100 billion in taxes that the law imposes on insurers over the decade. Most significantly, the premiums have to cover the cost of caring for seriously ill people for the same price as healthy people.

Every state that tried this community rating scheme (including New York ) has seen premiums soar as the healthy, unwilling to foot the bill, stop buying insurance.

The bailout provision was inserted in the law by design to encourage insurers to set premiums too low. That helps the law, and its Democratic backers, look good. It was deception from the start, and a real effort to make a fatally flawed scheme appear as if it is providing affordable health plans. 

Kathleen Sebelius

Sources: TheHill, FoxNews

Photo: US Mission Geneva on Flickr 



  1. WackyD

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