Double Digit Rise in Health Insurance Rates Predicted

Health Insurance Companies are hiking premiums for some customers by double digits – even after the Obama administration’s health care laws efforts to curtail rapid rise in insurance costs. Small businesses and people without employer aided insurance are the most susceptible.

Aetna, of California, proposes an increase of 22%, Anthem Blue Cross 26% and Anthem Blue Shield 20%. Surprisingly the rate hikes follow a 39% increase by Blue Cross in 2010, which was the force behind the federal law known as ‘Affordable Care Act’ which was passed 2 years back.

In states such as Ohio and Florida, insurers have raised rates by at least 20% which amounts to several hundred dollars a month.

According to the Health Care Law, regulators will review all requests for increase in rates of more than 10% - the requests are posted on a federal website – health.gov - with the regulators evaluations.

The review process shows a disparity in the rates, demonstrating the prominent difference in places like New York and California. In New York regulators wield the authority to deny or decrease rates deemed excessive – not so in California.

New York used its comprehensive powers and kept increases for small group markets and individuals under 10% in 2013, while California does not have the power to deny rate increases.

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In recent years the increase has been annually and in single digits due to weak economy. Price Water House Coopers estimates a 7.5% increase in the next year.

Federal regulators are of the opinion that the premium rates would be higher without the law to set a limit on the profits and administration costs of the insurer.

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The rates paid by employers are monitored closely as compared to small businesses and individuals.

Reference: Reed Abelson – New York Times.

Source-Medindia