By Brandon Moseley
Alabama Political Reporter
Six years ago Americans were told if they liked their insurance plan they could keep their insurance plan. If they liked their doctor they could keep their doctor. Most have since learned that the lofty promises that were told in order to pass the Patient Protection and Affordable Care Act of 2010 (Obamacare) were “inaccurate” at best.
Monday, August 8, 2016, as originally reported by Birmingham’s WBRC Fox 6, Alabama’s largest health insurance carrier, Blue Cross Blue Shield, in filings with the federal government is seeking to raise its Affordable Care Act plans by as much as 40 percent, affecting more than 160,000 people, according to the filings.
State Representative Tim Wadsworth (R-Arley) said, “OBAMACARE OR HILLARYCARE NO DIFFERENCE.”
The Hoover based insurer is asking for increases of: Blue Value Gold – 37.0 percent (increased 28 percent in 2016, increased 8.51 percent in 2015); Blue HSA Gold – 36.0 percent (increased 28 percent in 2016, increased 8.51 percent in 2015); Blue Cross Select Gold – 40.3 percent; Blue Secure Silver – 40.6 percent (increased 28 percent in 2016, increased 8.51 percent in 2015); Blue Value Silver – 40.8 percent (increased 28 percent in 2016, increased 8.51 percent in 2015); Blue Cross Select Silver – 41.5 percent; Blue Saver Bronze – 26.1 percent (increased 28 percent in 2016, increased 8.51 percent in 2015); Blue HSA Bronze – 23.5 percent (increased 28 percent in 2016); and Blue Protect – 23.4 percent (increased 28 percent in 2016, increased 8.51 percent in 2015).
According to the Kaiser Foundation’s Health Insurance calculator, a single 46 year old male who does not smoke in Alabama can expect to pay $338 a month for a basic silver plan now. If Blue Cross Blue Shield get their 41 percent rate increase in the typical silver plan; that would increase $138.58 a month to $476.58 a month in 2017.
If that same man had a 35 year old wife and two kids, who also don’t smoke, their insurance would cost $899 a month for a silver plan. If that increases 41 percent is applied their costs would jump $368.59 a month to $1267.59 a month
Most people who understood insurance grasped early on that rates would understandably soar with Obamacare……particularly on the individual market. The problem is adverse selection. The more a person feels that they needs something the more that they are willing to pay. A healthy man who seldom ever sees a doctor might look at that $476.58 a month and go buy a new truck or a bass boat instead. A family man with a sick child on the other hand, will pay the $1267.59 a month, move in with his in-laws and give up on their dream of ever owning a home for example. That is what is what is meant by adverse selection in the industry. Prior to Obamacare rates were a whole lot lower, but insurers denied anybody who might be a risk. Now they are unable to deny coverage to anyone, even the obese, so costs increase. When insurers pass those costs on to consumers, healthy people drop the coverage and “risk it”. Really sick people will find a way to pay the premium. This means that most plans have a shrinking pool of increasingly costly people to insure.
Not everybody will feel this increase. Many people receive insurance subsidies because their income is too low. If that family of four were making $39,000 a year their insurance only costs $149 a month in 2016 as they qualify for a $750 a month subsidy. If their income dropped to $29,000 their insurance would only cost them $49 a month. On the other hand, if the wife went back to work, and household income shot up to $59,000 their premiums would climb to $391 a month. If they really did well and started their own business it could jump up to $899 a month, which is projected to jump to $1267.59 a month in 2017
Critics claim that the federal government could have insured all of the uninsurable people for a fraction of what Obamacare is costings. The health insurance issues are forcing many Americans not to start their own business or leave their job and the reliable coverage there. This has negative effects for the American economy. US Senator Bernie Sanders (I-Vermont) advocated moving to a single payers system where the government is the only payer. The new President will likely have to make some very tough decisions about what direction to take health care.