We're getting a clearer picture of Obamacare premiums for next year, and with them another Republican myth about the law falls: there won't be rate shock this time around. Some markets will have larger increases than others. Some will actually have lower prices. Jonathon Cohn
has the goods.
Insurers have filed their proposed 2015 premiums with state regulators and the regulators have started making those submissions public. It’s still too early to draw definitive, specific conclusions. But a group of experts that I consulted agreed that a clear trend is emerging.
Coverage will get more expensive for the majority of consumers, as it almost always does. Changes in premiums will vary enormously, from state to state and from plan to plan. But, overall, the 2015 premiums increases will not be significantly worse than they were in the past. They might even be a little better.
One of the outliers is Florida, and there's some evidence to show that Gov. Rick Scott's and the GOP legislature's hostility to Obamacare is resulting in higher premiums for Floridians. Florida Blue, the Blue Cross affiliate there is the largest carrier in the state and has announced average premium increases of 17.4 percent. Last year, "the legislature passed and Governor Rick Scott signed a bill that suspended state government's ability to reject excessive premium increases." Insurance companies in Florida can get away with high rate increases because the state has stepped back. In contrast, California has continued its vigilant oversight of insurers and has given exchange managers the ability to bargain with providers. Rates there will increase on average just 4.2 percent.
The import of all this is summed up by healthcare expert Larry Levitt:
"Some insurers are increasing premiums quite a bit, but others are actually decreasing premiums, which is almost unheard of in health insurance,” says Larry Levitt, senior vice president at the Kaiser Family Foundation. “It seems that insurers that priced high are now moderating their premiums to gain market share, while those that priced low may be compensating for being a bit too optimistic. The overall story here is that insurers see the potential to gain market share and revenues. It’s a signal from insurance companies that they believe the law is here to stay and that the market is stable."
Adding to the evidence that insurance companies are investing in this law is the fact that a number of big insurers
have decided to enter the insurance exchanges after sitting out the first year.
There are still plenty of tweaks that need to be made in the law—for example, figuring out a way to deal with a state like Florida. But it's pretty clear that there's not going to be any death spiral that will destroy the law, dashing the hopes of tea partiers everywhere.