Critical Condition

Obamacare and Insurance Premiums: Out of the Frying Pan, into the Fire

During the (initial) congressional debate over Obamacare, President Obama vilified Anthem Blue Cross of California for a 39-percent rate increase. On Wednesday, the Hartford Courant reported that Obamacare itself may increase premiums by similar amounts:

Health insurers are asking for immediate rate hikes of more than 20 percent in Connecticut for some plans, citing rising medical costs and federal health reform laws as reasons…

In what might appear to be an oddity, companies are citing a huge range of effects that the health care reform mandates will have on plan prices — from near zero to well over 20 percent. The reason is that among all the plans, some already deliver the provisions required by health reform, while others do not…

Anthem Blue Cross and Blue Shield in Connecticut, by far the largest insurer of Connecticut residents, said in a letter that it expects the federal health reform law to increase rates by as much as 22.9 percent for just a single provision — removing annual spending caps. The mandate to provide benefits to children regardless of pre-existing conditions will raise premiums by 4.8 percent, Anthem said in the letter. Mandated preventive care with no deductibles would raise rates by as much as 8.5 percent, Anthem said.

It was unclear how those separate factors would add up for Anthem’s plans, but those potential increases were all on top of rising medical costs.

If those increases are cumulative, Obamacare could increase premiums for some Connecticut residents by more than 36 percent.

Compare that to what President Obama said in his weekly radio address on February 20:

The other week, men and women across California opened up their mailboxes to find a letter from Anthem Blue Cross. The news inside was jaw-dropping. Anthem was alerting almost a million of its customers that it would be raising premiums by an average of 25 percent, with about a quarter of folks likely to see their rates go up by anywhere from 35 to 39 percent

And as bad as things are today, they’ll only get worse if we fail to act…We’ll see exploding premiums and out-of-pocket costs burn through more and more family budgets.

It sure seems like President Obama promised that Obamacare would make things better. Instead, it pushed us out of the frying pan and into the fire.

HHS Secretary Katheleen Sebelius said that Anthem Blue Cross of California’s 39 percent rate increase “just doesn’t make a lot of sense to people across America.” She said those “extraordinary” increases threaten “to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.” Will she say the same about Obamacare’s premium increases? Or will she threaten to put Anthem Blue Cross and Blue Shield of Connecticut out of business for its insolence?

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