New Report Confirms ObamaCare Rate Shock On Horizon

RNC Communications - May 8, 2014

Good afternoon – President Obama and Washington Democrats promised a lot of things would happen under ObamaCare: you could keep your plan, you could keep your doctor, it would bend the cost curve down, and premiums would go down by $2,500. None of it was true. Adding insult to injury for the millions of Americans kicked off their plans and forced into the ObamaCare exchanges is a new report showing that many of them will confront double digit premium increases this year. No doubt this is not welcome news for 2014 Democrats facing tough races this fall, who will have to contend with ObamaCare rate shock stories in the closing weeks of their campaigns. See the recap below from RNC Research: 

New Report Confirms That ObamaCare Premiums Face Double-Digit Increases


The Hill Headline: “Study: ObamaCare Premiums May See Double Digit Rise.” (Ferdous Al-Faruque, “Study: ObamaCare Premiums May See Double Digit Rise,” The Hill, 5/8/14)

According To Avalere, A Health Care Analysis Leader, Some States Could See “Double Digit” Increases In ObamaCare Health Insurance Premiums. “A leading health care analysis group said Thursday that insurance premiums in some states may see double digit increases this year under ObamaCare, but not because of age discrepancies.” (Ferdous Al-Faruque, “Study: ObamaCare Premiums May See Double Digit Rise,” The Hill, 5/8/14)

ObamaCare Exchange Plans Will Have Increased Premiums Due To Increasing Costs And The Increased Utilization Of Health Services. “However, the group said increasing cost of medical care, use of services and new technology will mean exchange plans will need to increase their premiums, and the hikes will vary state-by-state.” (Ferdous Al-Faruque, “Study: ObamaCare Premiums May See Double Digit Rise,” The Hill, 5/8/14)

  • Avalere: “Premium Increases Will Vary Geographically, And Will Depend In Part On The Competitiveness Of Provider Markets.” (“Avalere Analysis On Exchange Enrollment Data,” Avalere, 5/2014)

According To Avalere, The Federal Government Will Bear A “Disproportionate Amount” Of The Costs Due To The Number Of People Receiving ObamaCare Subsidies. “The group also said the federal government will have to take on a disproportionate amount of the health care cost in states with larger populations that qualify for government health care subsidies.” (Ferdous Al-Faruque, “Study: ObamaCare Premiums May See Double Digit Rise,” The Hill, 5/8/14)

  • As The Government Picks Up The Increasing Tab On Premiums, Insurers Have Less Of An Incentive To Price Plans Competitively. “Nationwide, 85 percent of exchange enrollees are receiving financial assistance. This ranges from 16 percent in Washington, DC to 94 percent in Mississippi. Looking ahead, the burden of any premium increases could be borne primarily by the government, rather than consumers, in highly subsidized states. While this could dampen the need for plans to price premiums competitively, it could also lead HHS to consider a more active purchasing approach over time.” (“Avalere Analysis On Exchange Enrollment Data,” Avalere, 5/2014)

Experts And Insurance Officials Agree That Premiums Are Not Going To Decrease 

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Bill Hoagland, Sr. Vice President At The Bipartisan Policy Center: “These [Premium] Increases Will Be Significant.” “‘My gut tells me that, for some people, these increases will be significant,’ said Bill Hoagland, a former executive at Cigna and current senior vice president at the Bipartisan Policy Center.” (Elise Viebeck, “O-Care Premiums About To Skyrocket,” The Hill’s Health Watch, 3/19/14)

Mark Bertolini, Aetna Chief Executive: In Some States, Premiums “Will Be Over Double Digits.” “He said those increases will range from ‘the very low single digits’ to ‘some that will be over double digits.’ That depends on the number of members, the demographics of memberships and what limited information the company has about new members, he said.” (Jason Millman, “Aetna: Late ObamaCare Changes Account For Half Of 2015 Premium Increases,” The Washington Post’s Wonk Blog, 4/24/14)

Chet Burrell Of CareFirst BlueCross BlueShield: “I Do Think That It’s Likely Premium Rate Shocks Are Coming.” “‘I do think that it's likely premium rate shocks are coming. I think they begin to make themselves at least partially known in 2015 and fully known in 2016,’ said Chet Burrell, chief executive officer of CareFirst BlueCross BlueShield. ‘That will be different in different parts of the country. I don't think it will be uniformly the same.’” (Caroline Humer and David Morgan, “U.S. Insurers Fear Backlash Over New ObamaCare Rate Increases,” Reuters, 4/2/14)

According To The President Of WellPoint In March 2014: “Rate Increases … Will Probably Be In Double Digit Plus.” “‘Looking at the rate increases on a year-over-year basis on our exchanges, and it will vary by carrier, but all of them will probably be in double digit plus,’ Ken Goulet, president of WellPoint’s commercial business, told investors in New York on Friday.” (David Morgan and Caroline Hunter, “Insurers See Double-Digit ObamaCare Price Rises In Many States Next Year,” Reuters, 3/21/14)

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