Tennessee Clears Steep Obamacare Rate Hikes
With premiums rising up to 62% for Obamacare subscribers, OSCAR Health might be the answer.
Tennessee clears steep Obamacare rate hikes
By ROBERT KING • 8/23/16 11:45 AM
Tennessee's insurance regulators approved increases of more than 40 percent for Obamacare plans next year, according to the Tennessean.
Blue Cross-Blue Shield has the highest rate hike for 2017 at 62 percent, nearly double the 36 percent increase adopted for 2016, the newspaper said.
Cigna's boost of 46 percent was approved, as was Humana's boost of 44 percent. Both insurers had asked for increases of about 20 percent but then asked the insurance regulator for higher rates after looking at what expected claims were.
Tennessee is likely to not be the only state facing higher Obamacare premiums in 2017. An analysis from consulting firm Avalere Health projected that average increases for the silver plan, the middle tier of plans, would be more than 20 percent.
Sen. Lamar Alexander, R-Tenn., previously criticized the healthcare law after the new proposed rates were announced, saying that Obamacare is "spiraling out of control."
The rate increases aren't the only bad news for Obamacare on Tuesday.
The insurance startup Oscar said on Tuesday that it will pull out of two Obamacare marketplaces next year in Dallas and New Jersey due to "uncertainties that will make it challenging for us to operate effectively."
Oscar doesn't have a large footprint in Obamacare, having a presence only in Los Angeles, New York, San Antonio and Orange County, Calif. It plans to expand into San Francisco's Obamacare marketplace next year.
Oscar CEO Mario Schlosser told Bloomberg that there are flaws in the way the individual market is set up. The individual market is for people who don't get insurance through work, and a majority of the market contains Obamacare.
Oscar is the latest Obamacare insurer to flee some markets. Aetna announced recently it will exit about 70 percent of its Obamacare markets next year and UnitedHealth will leave most of the 34 states it offers plans in.
The reason is mounting financial losses for insurers due to a sicker-than-expected enrollment population.
Why Single-Payer Is Inevitable
BY ROBERT REICH
The best argument for a single-payer health plan is the recent decision by giant health insurer Aetna to bail out next year from 11 of the 15 states where it sells Obamacare plans. Aetna’s decision follows similar moves by UnitedHealth Group, the nation’s largest health insurer, and by Humana, another one of the giants.
All claim they’re not making enough money because too many people with serious health problems are using the Obamacare exchanges, and not enough healthy people are signing up.
The problem isn’t Obamacare per se. It lies in the structure of private markets for health insurance – which creates powerful incentives to avoid sick people and attract healthy ones. Obamacare is just making this structural problem more obvious.
In a nutshell, the more sick people and the fewer healthy people a private for-profit insurer attracts, the less competitive that insurer becomes relative to other insurers that don’t attract as high a percentage of the sick but a higher percentage of the healthy.
Eventually, insurers that take in too many sick and too few healthy people are driven out of business.
One real choice in the future is a hugely expensive for-profit oligopoly with the market power to charge high prices even to healthy people and stop insuring sick people.
If insurers had no idea who’d be sick and who’d be healthy when they sign up for insurance (and keep them insured at the same price even after they become sick), this wouldn’t be a problem. But they do know – and they’re developing more and more sophisticated ways of finding out.
Health insurers spend lots of time, effort, and money trying to attract people who have high odds of staying healthy (the young and the fit) while doing whatever they can to fend off those who have high odds of getting sick (the older, infirm, and the unfit).
As a result we end up with the most bizarre health-insurance system imaginable: One ever better designed to avoid sick people.
If this weren’t enough to convince rational people to do what most other advanced nations have done – create a single-payer system that insures everyone, funded by taxpayers – consider that America’s giant health insurers are now busily consolidating into ever-larger behemoths.
UnitedHealth is already humongous.
Aetna, meanwhile, is trying to buy Humana in a deal that will create the second-largest health insurer in the nation, with 33 million members. The Justice Department has so far blocked the deal.
Insurers say they’re consolidating in order to reap economies of scale. But there’s little evidence that large size generates cost savings.
In reality, they’re becoming huge to get more bargaining leverage over everyone they do business with – hospitals, doctors, employers, the government, and consumers. That way they make even bigger profits.
But these bigger profits come at the expense of hospitals, doctors, employers, the government, and, ultimately, taxpayers and consumers.
There’s abundant evidence, for example, that when health insurers merge, premiums rise. researchers found, for example, that after Aetna merged with Prudential HealthCare in 1999, premiums rose 7 percent higher than had the merger not occurred.
What to do? In the short term, Obamacare can be patched up by enlarging government subsidies for purchasing insurance, and ensuring that healthy Americans buy insurance, as the law requires.
But these are band aids. The real choice in the future is either a hugely expensive for-profit oligopoly with the market power to charge high prices even to healthy people and stop insuring sick people.
Single Payer InevitableOr else a government-run single payer system – such as is in place in almost every other advanced economy – dedicated to lower premiums and better care for everyone.
We’re going to have to choose eventually.
Republished with permission from Robert Reich’s Blog