Obamacare Rates Increasing, . . . no,really ! They really are.

From the New York Times

"Blue Cross and Blue Shield plans — market leaders in many states — are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota, . . .

The Oregon insurance commissioner . . . has just approved 2016 rate increases for companies that cover more than 220,000 people. Moda Health Plan, which has the largest enrollment in the state, received a 25 percent increase, and the second-largest plan, LifeWise, received a 33 percent increase.
. . . the Oregon insurance commissioner, found that the cost of providing coverage to individuals and families in 2014 was $830 million, while premiums were only $703 million. She directed some carriers to raise rates in 2016 even more than they had proposed.
'Rate increases will be bigger in 2016 than they have been for years and years and will have a profound effect on consumers here. Some may start wondering if insurance is affordable or if it’s worth the money.

Blue Cross and Blue Shield of New Mexico has requested rate increases averaging 51, . . .

Geisinger [Health Plan] in Pennsylvania, . . . often praised as a national model of coordinated care, has requested an increase of 40 percent in rates for its health maintenance organization.

Coventry Health Care, now owned by Aetna, is seeking rate increases that average 22 percent, . . . in Missouri.

In its proposal to increase rates by an average of 25 percent, . . . Blue Cross and Blue Shield of North Carolina cited 'inpatient costs, particularly in treatment of cancer and heart conditions, emergency room utilization, and cost for specialty drug medications' to treat hepatitis C, breast cancer and cystic fibrosis.

Blue Cross and Blue Shield of Kansas sought increases averaging 37 percent for 2016."

Why ?

"Insurers with decades of experience and brand-new plans underestimated claims costs.
'Our enrollees generated 24 percent more claims than we thought they would when we set our 2014 rates,' said Nathan T. Johns, the chief financial officer of Arches Health Plan. It has requested rate increases averaging 45 percent for 2016.

The Obama: 'insurance companies have to spend at least 80 percent of every dollar that you pay in premiums on your health care — not on overhead, not on profits, but on you.'
In financial statements filed with the government in the last two months, some insurers said that their claims payments totaled not just 80 percent, but more than 100 percent of premiums. And that is unsustainable.
__At Blue Cross and Blue Shield of Minnesota, for example, the ratio of claims paid to premium revenues was more than 115 percent.
__BlueCross BlueShield of Tennessee, the largest insurer in the state’s individual market, . . .proposed increase of 36 percent, . . .
'There’s not a lot of mystery to it, said Roy Vaughn, a vice president of the Tennessee Blue Cross plan. 'We lost a significant amount of money in the marketplace, $141 million, because we were not very accurate in predicting the utilization of health care.' "

Question for DonDiego....Can you tell us if this $141 million dollar loss claimed by Tennessee Blue Cross was fully recognized as a corporate loss OR if any of that loss was reimbursed by the Federal Government in the form of reinsurance or Risk Corridor Programs? That's a pretty big hit for one company.

"Change you can believe in".

It was my understanding when the ACA details were first starting to be disclosed that the Fed.govt. was going to make good on any shortfalls to the ins. cos. I forget exactly how it was worded, but that was the gist of it. I even started a thread about it with the article and link a long time ago. I'd look it up but i'm no good doing searches for past threads here.

It was my understanding when the ACA details were first starting to be disclosed that the Fed.govt. was going to make good on any shortfalls to the ins. cos. I forget exactly how it was worded, but that was the gist of it. I even started a thread about it with the article and link a long time ago. I'd look it up but i'm no good doing searches for past threads here.

Alas, DonDiego cannot, . . . at least not with any certainty.

DonDiego can tell alanleroy that the Obamacare Law did not include any language appropriating funds for the Risk Corridor scheme. About a year ago when the Congress asked Health and Human Services what legal authority they would employ to issue Risk Corridor payments, HHS responded they would consider the payments "user fees". However, there was/is no provision for such Risk Corridor user fees in the FY 2015 budget. It's a mystery.

It would seem The Obama does pretty much as He pleases.

And two months ago Standard and Poors reported the amount of money that profitable insurers expect to pay into the program was less than an estimated 10 percent what is expected to be paid out to unprofitable insurers.
Standard & Poor's said that even if CMS . . . used risk corridor collections from 2015 to first cover the unpaid amounts in 2014, "we do not expect the individual exchange business in 2015 to be profitable enough to offset the deficit from the previous year."
No money has yet been paid out under the program.
Ref: CNBC

It begins to look like Obamacare will not be budget neutral after all. DonDiego, for one, is not entirely surprised.

Underestimation of the "risk corridor". Yep.

What I understand this risk corrider miscalculation to be, or at least part of it, was that'new' patients covered under the ACA would be younger and have fewer medical problems. But what has been found is the opposite. Well, duh.

There is apparently a larger percentage of younger people (and older as well) who, because they didn't have insurance, have presented with the same or worse major medical problems everyone has, worse due to lack of any medical management. Not to mention the tsunami of pre-existing conditions previously denied for payment, now mandated. Therefore, insurance companies paid out much more than they had predicted They aren't benevolent organizations, unlike what they say in their fancy brochures. They are in it for the money, like everyone else. Premiums will rise, and not for nothing.

It was just last week when DonDiego noted the massive stock spikes to health insurance companies in the wake of the Supreme Court verdict due to their projected profitability from the ACA. And today DonDIego tells us those same companies are going to be strapped for cash because they aren't collecting enough in premiums ! What is one to do with such conflicting messages?

We played this same game last year where insurance companies asked for bigger premiums ... were predicted to implement them by our fair and balanced commentators .... and then were denied...and then went on to make massive profits.

I dont know what premium increases will be for 2016. I do know that basing that prediciton on insurance companies who ask for more money is historically inaccurate.

DonDiego is not surprised that pjstroh is enjoying "the game".

Did pjstroh actually read the initial post? Like this part:
"The Oregon insurance commissioner . . . has just approved 2016 rate increases for companies that cover more than 220,000 people. Moda Health Plan, which has the largest enrollment in the state, received a 25 percent increase, and the second-largest plan, LifeWise, received a 33 percent increase.
. . . the Oregon insurance commissioner, found that the cost of providing coverage to individuals and families in 2014 was $830 million, while premiums were only $703 million. She directed some carriers to raise rates in 2016 even more than they had proposed.
'Rate increases will be bigger in 2016 than they have been for years and years and will have a profound effect on consumers here. Some may start wondering if insurance is affordable or if it’s worth the money."

Not only did the Oregon Insurance Commisioner raise the rates; she "directed" insurers to raise rates more than they had requested.

Really !

I will turning 65 in a few months. Never thought that would be such a good thing. Glad I will be able to avoid the increase by going on Medi Care.