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Obamacare Is Already Forcing Private Insurers To Lower Their Premiums

Posted by on May. 16, 2013 at 10:39 AM
  • 30 Replies

Obamacare Is Already Forcing Private Insurers To Lower Their Premiums

President Obama signs the Affordable Care Act into law

Looks like Obamacare is more “on track” than “train wreck.

In a striking illustration of the promise that the health law holds for consumers, two Oregon private insurers vying to sell coverage on the state’s Obamacare insurance marketplace this October arereevaluating their opening bids for the plans’ monthly premiums. The reason? A side-by-side regional comparison of all proposed 2014 premiums for Oregon marketplace plans became public on Oregon’s marketplace website Thursday, and showed that the two insurers’ planned monthly premiums were far higher than other proposals. That raised fears among the companies’ officials that their plans wouldn’t be competitive on the market later this year, leading them to proactively request a ratereduction — and as more of Obamacare is implemented, state insurance commissionersexpect that trend to continue:

“Posting rate comparisons company-by-company is a taste of what is to come,” says Cheryl Martinis of the Oregon Insurance Division.

Judging by the reaction, there’s already an impact.

Providence Health Plan on Wednesday asked to lower its requested rates by 15 percent. Gary Walker, a Providence spokesman, says the “primary driver” was a realization that the plan’s cost projections were incorrect. But he conceded a desire to be competitive was part of it.

A Family Care Health Plans official on Thursday said the insurer will ask the state for even greater decrease in requested rates. CEO Jeff Heatherington says the company realized its analysts were too pessimistic after seeing online that its proposed premiums were the highest.

“That was my question when I saw the rates was, ‘Can we go in and refile these?’” he said. “We’re going to try to get these to a competitive range.”

Although some insurers have been using Obamacare as an excuse to hike premiums despite record profits, such rate hikes have been rarer — and less extreme — since the law’s passage. And to emphasize, this is all happening before the state has had a chance to review and approve initial plan rates — much less launch the actual marketplace. After the exchange opens up, consumers will have even more detailed information about marketplace plans, including the ability to compare — not just rates — but actual benefits offered on the plans side-by-side.

That’s particularly significant because much of the current variation in health plan premiums stems from rampant health care price opacity and wildly divergent benefits offered on different health plans — a status quo that won’t last in the Obamacare era since the law requires qualifying insurance plans to offer a base level of ten “essential health benefits,” including prescription drug, mental health, and maternity services. That means that Americans will be able to go online and figure out whether a plan costs more because it actually provides more robust benefits, or because an insurance company is just trying to gouge prices and maximize profits. Insurance offered on the marketplaces will be separated into Bronze, Silver, and Gold plans based on how generous their offered coverage is, making consumer comparisons between similar health plans simple.

As Thursday’s development shows, that public information empowers consumers by forcing insurers to compete with one another to attract customers. Or to put it another way — and contrary to conservative fear-mongering about the law — Obamacare is working exactly as it was intended to. And with 24 million Americans expected to gain coverage through the marketplaces by 2016, that’s great news for Americans’ pocketbooks — as well as their health.

by on May. 16, 2013 at 10:39 AM
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Replies (1-10):
erika9009
by Silver Member on May. 16, 2013 at 11:54 AM
2 moms liked this

It's not ObamaCare that is forcing the companies to lower the premiums, IT'S THE FREE MARKET.

If it was ObamaCare, then there would have been some set price for a type of med insurance.

In this case, the companies saw the competitors bids and went "Oh crap, we are to high.  We need to lower our prices so people will choose us"

That is free market captialism..........................NOT ObmamCare.


JakeandEmmasMom
by Gold Member on May. 16, 2013 at 12:09 PM
3 moms liked this

 I'm still not convinced that they won't conspire at some point to keep prices high.

 

myheartbeat
by Member on May. 16, 2013 at 12:19 PM

I have been informed by  my employer,  A health care organization that owns 159 hospitals ,That as of Jan. 2014  our insurance rates will increase by 25 %, due to obamacare.

jcrew6
by Jenney on May. 16, 2013 at 12:30 PM
3 moms liked this

Meanwhile...  When we move away from liberal ThinkProgress, we find other news articles

A raft of former Democratic proponents are so eager to distance themselves from ObamaCare that they are looking for a scapegoat.

http://www.usatoday.com/story/opinion/2013/05/10/affordable-care-act-obamacare-column/2144409/

cammibear
by Bronze Member on May. 16, 2013 at 12:34 PM
1 mom liked this
Yeah, our premiums have already gone up. In fact, I don't know of anyone who hasn't been told to expect an increase.


Quoting myheartbeat:

I have been informed by  my employer,  A health care organization that owns 159 hospitals ,That as of Jan. 2014  our insurance rates will increase by 25 %, due to obamacare.


Analeigh2012
by Silver Member on May. 16, 2013 at 1:00 PM
1 mom liked this
What is key here, IMO, is that this is only the exchange and I agree, this is a classic free enterprise adjustment. The only piece ACA can take credit for is that the rate comparison is online. If it wasn't, the companies would not have realized they were higher u til they saw a lower market share and investigated, then they would have adjusted. Economics 101 - not Obamacare.

But now, what I would like to know is what is covered. If there is a reduction of rates, I do not believe they are covering the same level or include more benefits. What are they cutting? I have also been prepping staff that our employer sponsored plans will be increasing at least another 19% on top of the 16% increase from 2012 to 2013.
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jcrew6
by Jenney on May. 16, 2013 at 1:02 PM
2 moms liked this


Health premiums could hike 400 percent under Obamacare

http://p.washingtontimes.com/news/2013/may/14/health-premiums-could-hike-400-percent-under-obama/


But what does the Energy and Commerce Committee, CBO, etc know....  ThinkProgress has all of the (liberal spinned) answers...

Quoting cammibear:

Yeah, our premiums have already gone up. In fact, I don't know of anyone who hasn't been told to expect an increase.


Quoting myheartbeat:

I have been informed by  my employer,  A health care organization that owns 159 hospitals ,That as of Jan. 2014  our insurance rates will increase by 25 %, due to obamacare.




jcrew6
by Jenney on May. 16, 2013 at 1:03 PM
1 mom liked this

Who will pay more under Obamacare? Young men

http://money.cnn.com/2013/05/14/news/economy/obamacare-premiums/


jcrew6
by Jenney on May. 16, 2013 at 1:05 PM

Senator Max Baucus, one of the leading Democrat sponsors of the PPACA, recentlypredicted the roll out of ObamaCare would be a "huge train wreck,"

http://www.youtube.com/watch?v=lj8OzgIlFHk

jcrew6
by Jenney on May. 16, 2013 at 1:08 PM


Affordable Care Act Market Changes: 14.0% average increase to premiums(2013-2014)

http://www.healthexchange.ca.gov/Documents/Factors%20Affecting%20Individual%20Premiums%20FINAL%203-28-2013.pdf


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