What a coincidence! Key states set to announce premium rate increases for 2015
posted at 10:41 am on May 22, 2014 by Ed Morrissey
Yesterday I noted that the Obama administration snuck the mechanism and $3.5 billion in funding for an insurer bailout, bypassing Congress and wheedling insurance companies to keep 2015 premiums low. The Hill’s report on the announcement dates for rate hikes explains the timing of this effort. Thirteen states will announce the newly approved rate plans for 2015 — including a handful of those Democrats desperately need to keep in the midterms:
Premiums are expected to go up in a majority of states, as they do every year, but the size of the increases could go a long way toward determining how much political damage Obama-Care inflicts on vulnerable Democratic lawmakers.
A survey by The Hill of state insurance commissioners found that news about ObamaCare premiums will hit nearly every week this summer, providing ample opportunity for Republicans to attack any significant premium hikes.
A slew of states will publish proposed prices in June, including Colorado and Louisiana — where the GOP is targeting Democratic Senate incumbents.
Others will wait until later in the season, including West Virginia and Arkansas. Sen. Mark Pryor (D-Ark.) voted for the Affordable Care Act in 2010, a fact that his opponent, Rep. Tom Cotton (R-Ark.), has repeatedly raised.
Sen. Kay Hagan (D-N.C.), a top GOP target, will see her state publish rates on Aug. 15 or later.
The need to get these regulatory changes in place now are rather obvious. Insurers who have experienced worse-than-expected demographics in their risk pools will have to substantially raise premiums in 2015 in order to counter the losses that they will incur from their new enrollees. These increases will get announced over the summer, which is bad enough for Democrats in the midterm elections, but will actually hit consumer eyeballs in an up-close-and-personal way in the fall, when open enrollment in both the individual and group markets take place. That will have consumers stunned and angry while marching to their polling stations, exactly what the White House fears most.
Rather than try to head that off with more happy talk, or with some “fixes” on ObamaCare that Democrats regularly endorse and never actually propose, the White House tried this threadbare workaround to sweeten the pot for insurers. This just shifts the costs from one channel to another, with consumers still bearing the load. By shifting it to consumers through the tax system, though, it makes the costs much more indirect and largely invisible, even though it’s quite real.
It’s basically bribery to insurers, as Investors Business Daily’s editorial board writes:
Last Friday, the Obama administration quietly expanded an insurance industry bailout program that it publicly insisted never existed. In exchange, Obama wants a big political favor from insurers. …
Keep in mind that only a few weeks ago, White House officials were denying that any such bailout existed in ObamaCare. The “risk corridor” program at issue, a White House budget spokesman said in March, was merely a “safety valve for consumers and insurers” transitioning to a “brand new market.”
It was, the administration promised, there only to protect insurers temporarily, as a way to encourage them to join ObamaCare, and was just like the one used in the Medicare Part D drug benefit program.
Besides, they said, the ObamaCare risk corridor program would be self-financing, with overly profitable insurers paying in so money-losing ones could take out.
But in his latest budget, Obama proposed setting aside $5.5 billion for the program, just in case. The Times makes clear: Obama expects something big in return.
The expanded guarantee comes, the paper says, “as part of an intensive administration effort to hold down premium increases for next year, a top priority for the White House as the rates will be announced ahead of this fall’s congressional elections.”
In short, Obama is offering the industry virtually unlimited taxpayer bailout money, in hopes that it will return the favor and avoid politically damaging rate hikes, at least until after November’s mid-term elections.
Ironically, the big driver of increasing health-care costs before ObamaCare was price-signal opacity. This attempt at bribing insurers to continue their loss-leader pricing into 2015 by promising a government payoff makes it clear that ObamaCare worsens that problem rather than helps resolve it. Instead of making price opaque for reasons of risk-pool management alone, now we have the added incentive for government to increase opacity for its own political purposes. And this time, we’ll be paying not just in cash, but in increasingly rationed health care.