Health Insurers Are Hiking Premiums To Offset Huge Obamacare Costs
A slew of health insurance companies are planning to up premiums for 2017 in an attempt to counterbalance the losses they have incurred since the implementation of the Affordable Care Act.
Humana, the Louisville-based insurer slated to merge with Aetna in a $37 billion deal, is the latest to say it’s considering hiking costs after seeing a 46 percent drop in earnings in the first quarter. Insurance companies have seen their costs skyrocket due to a provision in the ACA requiring them to cover preexisting conditions – leading to an influx in the use of medical services and prescriptions by patients.
While the amount premiums will increase will vary by state, the Wall Street Journal reports it signals the law hasn’t stabilized industry and companies will likely push for changes to the president’s landmark legislation.
“Most marketplace enrollees are receiving premium tax credits that cushion the effects of premium increases,” the Kaiser Family Foundation said in a report released Thursday. “If insurers now losing money are able to adjust premiums to become profitable, the market could begin to stabilize.”
A large number of insurers proposed double-digit increases for individual plans in Oregon, with Moda Health Plan, Inc. requesting a 32.3 percent increase, Oregon’s Health CO-OP a 32 percent hike and Providence Health Plan asking for a 29.6 percent raise.
“It’s a pretty good bet if a plan lost money in 2016, it will adjust pricing in 2017,” Sam Glick, a partner with consulting firm Oliver Wyman, told TheWSJ.
In addition to increasing premiums, some insurers are contemplating pulling out of Obamacare exchanges in certain states to offset losses. UnitedHealth Group, the country’s largest insurer, announced in April it would be pulling out of most states, and Humana announced it is considering following suit Wednesday.
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