Problems for Obamacare: Largest Texas insurer asks big price hike
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Fresh problems for “Obamacare”: The largest health insurer in Texas wants to raise its rates on individual policies by an average of nearly 60 percent, a new sign that President Barack Obama’s overhaul hasn’t solved the problem of price spikes.
Texas isn’t alone. Citing financial losses under the health care law, many insurers around the country are requesting bigger premium increases for 2017. That’s to account for lower-than-hoped enrollment, sicker-than-expected customers and problems with the government’s financial backstop for insurance markets.
The national picture will take weeks to fill in. With data available for about half the states, premium increases appear to be sharper, but there are also huge differences between states and among insurers. Health insurance is priced locally.
Earlier this week, North Carolina’s largest insurer said it will seek an average increase of 18.8 percent.
A recent analysis of nine states by the consulting firm Avalere Health found that average premium increases for the most popular kind of plan ranged from 5 percent in Washington state to 44 percent in Vermont.
Millions of customers will be shielded from price hikes by government subsidies, which typically cover more than 70 percent of the premiums. People who don’t have access to a workplace plan can buy a policy directly on the health law’s marketplaces.
But many consumers aren’t eligible for the income-based subsidies and get no such protection. That demographic includes business owners, self-employed people and early retirees. Under the law, most Americans are required to have health insurance or risk being fined.
The Obama administration said concerns about 2017 premiums are premature and overblown.
In a statement, the Health and Human Services Department said the Texas rate request is just the beginning of a process. Consumers in Texas and other states will have lower-premium options when sign-up season begins Nov. 1. If they don’t like what their current insurer is charging for 2017, they can switch.
“Consumers will have the final word when they vote with their feet during open enrollment,” said the statement.
Big premium hikes from a single insurance company have had an impact on the health care debate before.
Back in early 2010, when Mr. Obama’s health care legislation appeared stalled in Congress, WellPoint’s planned 39 percent increase for some California customers galvanized the White House and its supporters to action. Mr. Obama signed the landmark legislation a few weeks later.
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