Maryland demands lower insurance rates; Aetna says sayonara to the state’s insurance exchange

posted at 2:01 pm on August 4, 2013 by Erika Johnsen

Much like California, the state of Maryland has been almost ostentatiously gung-ho about the implementation of the Patient “Protection” and “Affordable” Care Act. Also like California, Maryland is encountering some most unfortunate problems the likes of which only they and their fellow esteemed Democrats seem not to have seen coming.

For instance: Maryland would really very much appreciate it if the insurance companies operating in their state could offer rates that the state arbitrarily deems to be affordable and attractive offers, the better to lure potential participants into the state’s ObamaCare exchanges. Insurance companies, meanwhile, would really like it if they could avoid operating at a loss. It’s selfish, really.

Aetna Inc pulled out of Maryland’s health insurance exchange being created under President Barack Obama’s healthcare reform law after the state pressed it to lower its proposed rates by up to 29 percent. …

In an August 1 letter sent to the Maryland Department of Insurance, Aetna said the state’s requirement for rate reductions off its proposed prices would lead it to operate at a loss. The rate reductions include products from Aetna and Coventry Health Care, which it bought this spring.

“Unfortunately, we believe the modifications to the rates filed by Aetna and Coventry would not allow us to collect enough premiums to cover the cost of the plans, including the medical network and service expectations of our customers,” Aetna said in the letter to insurance commissioner Therese Goldsmith.

According to online documents, Aetna had requested an average monthly premium of $394 a month for one of its plans and the agency had approved an average rate of $281 per month.

And it was just the other day that ObamaCare’s supporters were touting Maryland’s lower rates as proof of the health care overhaul’s success.

Economics are hard.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Comment pages: 1 2

Within the last six years, the company from which I retired, furnished supplemental insurance from a Maryland based national company for about $12K for the Old Country Girl and me. I decided that was a little steep, so I checked the Oklahoma office of that company, and I got the same insurance for less than #5K. Either Maryland is more expensive than Oklahoma for the same medical treatment, or my employer was making a handy profit off my insurance, or the insurance company was ripping off the people of Maryland. That was the experience of other retirees on that insurance. Word got around, and I think they are all using the Oklahoma insurance office.

Old Country Boy on August 4, 2013 at 7:54 PM

There’s another possibility. For one reason or another, maybe it was that much more expensive for your insurer to do business in Maryland than in Oklahoma. Considering the Shenanigans that Maryland is pulling now, I’m guessing that’s much more likely to be the case.

gryphon202 on August 4, 2013 at 8:07 PM

Does this mean that Marylanders won’t be able to keep their doctor?

Khun Joe on August 4, 2013 at 8:45 PM

Math is tough.

joecollins on August 4, 2013 at 9:26 PM

We should outlaw health insurance of all types.
Pay for it yourself.
Watch health care costs spiral downward overnight.

Remove the deep pockets and you remove the hands in it.

Bubba Redneck on August 4, 2013 at 9:33 PM

We should outlaw health insurance of all types.
Pay for it yourself.
Watch health care costs spiral downward overnight.

Remove the deep pockets and you remove the hands in it.

Bubba Redneck on August 4, 2013 at 9:33 PM

I dunno about outlawing health insurance, but I think the free market may take care of that anyway. You’re seeing a small but increasing number of doctors going to cash-only on their own.

gryphon202 on August 4, 2013 at 10:06 PM

It’s selfish, really.

But we demand that you sacrifice for the common good.

AshleyTKing on August 4, 2013 at 11:03 PM

We should outlaw health insurance of all types.
Pay for it yourself.
Watch health care costs spiral downward overnight.

Remove the deep pockets and you remove the hands in it.

Bubba Redneck on August 4, 2013 at 9:33 PM

.
I dunno about outlawing health insurance, but I think the free market may take care of that anyway. You’re seeing a small but increasing number of doctors going to cash-only on their own.

gryphon202 on August 4, 2013 at 10:06 PM

.
Don’t need to outlaw insurance, we need to outlaw the MANDATE.

Here in beautiful Lancaster Co PA, the Amishers have been paying their medical expenses with cash since forever, and they get a price break on account of this. Some whiny idiot wrote in to the opinion section of the Lancaster Intelligencer Journal, complaining that the local medical professionals were showing ‘favoritism’ to the Amish Church members.
Someone shot right back in the next day’s paper that “if you pay cash at time of service, then you’d get the same price break.”

That opened a few eyes (but not nearly enough).

listens2glenn on August 4, 2013 at 11:51 PM

The problem with the mandates is that it establishes a price floor by requiring the provision of a mandatory suite of services that the customer may not want or need. It makes it impossible to offer the kind of insurance that a customer wants, especially if they want a minimal or less extensive array of services to be covered.

A proper market-based exchange would offer a host of plans ranging from minimal (e.g. catastrophic and/or high deductible) plans that would tend to be cheap to the extensive (covers everything) which would be very expensive. The only major responsibility of the government would be to make sure that the plans are accurately described and honestly carried out. Then let the consumer decide what he wants or can afford.

But that is not what these exchanges are up to. In part because the scheme wants the young and healthy to subsidize (rather significantly) the older population who tend to have more health costs.

Russ808 on August 5, 2013 at 6:36 AM

Does this mean that Marylanders won’t be able to keep their doctor?

Of course they can keep their doctors. They will just have to pay for their doctor’s services out of their own pockets rather than having a third party pay for it.

Come to think, maybe they should talk to their doctors about a cash-payment discount. After all, think how much the doctor saves by avoiding the administrative overhead of dealing with an insurance company.

No Truce With Kings on August 5, 2013 at 7:53 AM

Aetna had requested an average monthly premium of $394 a month for one of its plans and the agency had approved an average rate of $281 per month.

I guess those who rode the short bus to their Poli Sci classes never learned why that wouldn’t work.

MNHawk on August 5, 2013 at 8:37 AM

We don’t. We are a nation of indifferent cowards.

gryphon202 on August 4, 2013 at 4:56 PM

THE AMERICAN PEOPLE WON’T STAND FOR IT!

Dr. ZhivBlago on August 4, 2013 at 4:58 PM

Not to argue with you Dr., but I’m really not seeing where “The American People” would riot for anything but the right to throw garbage cans thru windows and grab free stuff. Rights and principles ceased to matter many years ago and we are only now starting to bear the cost of that loss.
Meh…I’m gonna go polish my Mossberg 500 tac. and CZ 85 combat.
Probably need them sooner rather than later I’m afraid.

wolfplus3 on August 5, 2013 at 8:44 AM

Aetna is being real a-holes of late. Maryland is looking less attractive by the day hour.

johnnyU on August 5, 2013 at 11:58 AM

Hey we can’t riot. Who would pay our doctor bills if we tripped and fell?

johnnyU on August 5, 2013 at 11:59 AM

Just reduce the salary of those in charge of the program below a “living wage” to save money and see how many of them continue in their positions. Liken that to a company having to make a profit and you see the real problem. The only way for those officials or the companies to continue is if they can economically survive.

Oh, maybe that is the real driving force behind obamacare….destroying the economy.

Pardonme on August 5, 2013 at 12:04 PM

I dunno about outlawing health insurance, but I think the free market may take care of that anyway. You’re seeing a small but increasing number of doctors going to cash-only on their own.

gryphon202 on August 4, 2013 at 10:06 PM

There is more to this than you know…

One of our alternate sales channels involves a rather large healthcare company ($12+ BILLION) setting up a division creating cookie-cutter nearsite/onsite clinics for employers. All doctors, no nurses and no insurance. For a flat fee per employee per month, employees have access to primary care doctors 24/7. We have been talking with them about a partnership for our services. If this takes off like I think it wil), whether or not you have “insurance” won’t make much difference if you can’t find any doctors to take it. The ACA will have driven healthcare even more to an employer-dependent model. Of course, that’s several years down the road…

dominigan on August 5, 2013 at 2:15 PM

Well there’s always Bob’s Insurance Co… They promise full coverage for the family at 50% off full price if you sign up with a cash payment mailed in by Aug 5th midnight. So, don’t even think about it.

Oh, and don’t forget their slogan… ‘You have to sign up for it to see what’s in it’.

RalphyBoy on August 5, 2013 at 9:16 PM

Wow, who could have seen this coming?

Chris of Rights on August 6, 2013 at 8:36 AM

Comment pages: 1 2