Under the current law, insurance companies are required to present their anticipated premiums for the following year to the Department of Health & Human Services for review in June. Please note that in spite of all the scary warnings you are going to hear, these “filings” are just the start of a conversation.
Like in any negotiation the first “offer” is always higher than expected In addition, regardless of what the stated premium will be, if it is unacceptable, HHS will tell the insurance companies who can then make adjustments. The premiums that you and I will pay will not be official until November 1.
HHS can only act if, in their opinion, the anticipated rate is 10% higher than the previous year. Then, and only then, can they require the insurance company to place an explanation for the premium increase on the insurance company’s website and withhold permission for an insurance company to participate in the Federal Marketplace if, in the opinion, HHS and the insurance company fail to negotiate a satisfactory compromise.
Under current law, HHS does not have the power to tell a private company what premium they must charge. (However you do. If the premium they offer is too high, in your opinion, simply buy your health insurance from someone else.)
Rather than blaming “greedy insurance executives” it would be a better use of one’s time to remember that state insurance laws, that were in place before the Affordable Care Act, do not allow an insurance company to continue to operate in a deficit. They are required, by existing state law, to set their premiums high enough to pay all of the anticipated medical bills they will get in the following year.
As doctors, hospitals and pharmacies continue to raise rates, health insurance companies must continue to raise premiums in order to remain compliant with State, as opposed to Federal, laws. (So often people forget that insurance companies must remain in compliance with two sets of laws and not just Obamacare.)
Remain calm and remember that we do not know what variables are required in each state above what is required by the ACA. In addition, these figures only represent the start of a conversation.
(It might be helpful to remember a little bit of Obamacare history. In 2013, the first year of Obamacare Annual Open Enrollments, Aetna proposed a specific rate in Maryland. They were told that they would have to lower their premium and operate in a deficit for the year. Aetna pulled completely out of Maryland.)
If anything, this exposes the lack of logic behind the ACA. Not only does the ACA fail to restrict the fees hospitals and doctors can charge for their services, it attempts to place federal regulations on private companies.
If Obamacare is not adjusted, there is a good chance that in the next few years the nation will have an acceptable law for the liberals, but no insurance option for the self-employed and those who work for companies that do not provide health insurance.
The Group health insurance market appears to have stabilized but the Individual health insurance marketplace, that is tied to the Federal Marketplace, has not.