Surprise! Or not, really, as costs have escalated across the US in the third iteration of Bending The Cost Curve Downward. However, the 60% explosion in premium rates in one of the poorest states in the US should raise eyebrows even among those who think government should run the insurance markets. Investors Business Daily reports on the huge increase in Mississippi:
The state already is near the bottom when it comes to the percentage of the subsidy-eligible individuals who are enrolled via HealthCare.gov — just 38%. Now Mississippi’s subsidized premiums are about to jump far more than any of the 36 other states using HealthCare.gov.
For 30-year-olds in Yazoo City earning about $25,000 (214% of the poverty level), the after-subsidy cost of the cheapest bronze plan will spike by $554, or 60%, in 2016.
That will hike the cost of this $6,800-deductible plan — the cheapest way to avoid paying a $695 mandate tax — to just under $1,500.
Up until now, ObamaCare’s failure to make coverage affordable for Mississippi’s — and America’s — working class earning somewhat more than 200% of the poverty level, or even a bit less, has yet to bite. The per-person penalty due last April for going uninsured in 2014 was just $95, or 1% of taxable income.
But don’t be surprised to hear some screaming when people find out during the coming ObamaCare enrollment period just how unattractive their options are for avoiding a hefty $695 tax penalty for failing to buy coverage in 2016.
Let’s emphasize this point: this is a 60% increase in the cost after the subsidies, the cost paid by the consumer even with government assistance. The subsidy shrinks this year in this market, so the gross increase in premiums is actually smaller — but still an eye-popping 12.1% in the third year of the program, far above the inflation rate. Recall that the backers of ObamaCare from Barack Obama on down claimed that government control of these markets would control costs and bring them into line with inflation.
Small wonder that people would rather pay the $695 annual penalty than a $1500 monthly premium, especially for a high-deductible plan:
When the Obama administration made its case for the mandate, it said the penalty would target “the few people who will refuse to buy health insurance — even though they can afford it — and who expect the rest of us to pick up the tab for their care.”
Tell that to Wylene Gary, the Yazoo City diner cashier featured in an article by Sarah Varney of Kaiser Health News, who canceled her coverage in 2014 when she discovered it had a $6,000 deductible.
“She figured that with a hospital bill that high, she would have to file bankruptcy anyway,” Varney wrote.
Gee, who could have predicted that those incentives would arise? Well, just about everyone except for the Democrats who rammed the bill through Congress in opposition to popular sentiment, both then and now. In essence, they have created the worst of both worlds — catastrophic health insurance at comprehensive-plan prices. Again.
At least Mississippians have that choice. In Utah, 45,000 consumers will have to find other insurance after their ObamaCare co-op went into receivership:
The Department of Insurance will take Arches into receivership, meaning it will supervise the processing of the health co-op’s remaining claims.
Arches, the only co-op health plan in Utah, began offering insurance through the Affordable Care Act in fall 2013, beginning coverage in January 2014. The nonprofit group says it’s ceasing operations because of a lack of funding from the federal “risk corridor” program, which was built into the Affordable Care Act and intended to protect insurance companies from their losses.
“As one of the carriers on the (health care) exchange, we stood to benefit by our calculations in excess of $30 million for those ‘risk corridor’ payments,” Tricia Schumann, chief marketing and communications officer for Arches, told the Deseret News. “We did anticipate those cash payments coming in … this quarter.”
In other words, the co-op needed back-door subsidies to stay open. Deseret News notes that seven other co-ops nationwide have shut their doors, and two are on the brink of bankruptcy thanks to the flawed models employed by ObamaCare. In Utah, this leaves consumers with only one health insurance option on the Healthcare.gov site in all but nine counties, impacting rural customers — those most likely to need help — without much choice for their mandated coverage.
This isn’t reform. It’s a demolition.