Despite the objectives of President Barack Obama’s Affordable Care Act, otherwise known as Obamacare, health insurance companies across the United States are pursuing and implementing raises in premiums as high as 26 percent. Even though the purpose of the health care law was to control the cost of health insurance, it seems small businesses and employees who do not have employer-provided insurance plans will be hit the hardest.
Several states, including Ohio and Florida, are facing the double-digit health insurance rate increases. In California, according to the insurers’ filings with the state for 2013, Blue Shield of California has proposed a 20 percent increase, Aetna is putting forward a 22 percent jump and the Anthem Blue Cross is suggesting a whopping 26 percent boost.
Dave Jones, an insurance commissioner in The Golden State, labeled the proposals as unreasonable and accused the firms of attempting to maximize profits. He added that this is one of the big loopholes in Obamacare, reports NBC News.
These increases could amount to several hundred dollars each month for small businesses and individuals.
Due to the new health care law, federal and state regulators are now permitted to review any requests for rate increases of at least 10 percent, which are posted at healthcare.gov that also consists of the bureaucrats’ assessments and evaluations. It also requires insurers to spend 82 cents of every dollar on health care services.
This means that leaders can strike down health insurance premiums. However, 37 state legislatures have told regulators that they do not have to participate in the decision making of every single proposed rate hike.
For instance, in New York, health insurance costs were slated to increase 12.4 percent in 2013, but due to measures taken by the New York Department of Financial Services, state residents will only see a 7.5 percent hike. According to New York Governor Andrew Cuomo, state officials, using a provision in the new law, saved taxpayers $500 million in premium costs.
“We have made progress in holding back rates, but we recognize that much more needs to be done,” said the governor in a press release. “This Administration is firmly committed to making sure that health insurance is available to all New Yorkers. It must be made affordable by identifying ways that can be used to restrain the rising cost of health care services.”
Nevertheless, the New York Times reports that other states that have had insurers submit requests of at least 10 percent have been deemed reasonable by state officials. Federal data showed that more than one-third of the rate increase requests were approved, while 26 percent were found unreasonable, 26 percent were modified and 12 percent were withdrawn.
Opponents of Obamacare say that individuals are not going to be able to afford the premiums, which will lead them to apply for the state exchange program in one year, a federally subsidized program. This means there will be added costs to the taxpayers, who could eventually see an increase in taxes.
Insurance companies argue premiums are rising because costs are going up, while also stating that it depends on the population being served, such as old and sick compared to young and healthy. Furthermore, insurers say abiding by new regulations and benefits requirements are significant factors to determine the insurance rates.
It is expected premiums will increase again in 2014 when taxes swell and new requirements have to be met.
Retired Texas Republican Congressman Ron Paul issued a statement this past summer relating to Obamacare. The three-time presidential candidate not only criticized the “mandate” involved, but also made the case that the health care law will do the exact opposite of what it was intended to do. The unintended consequences will lead to a lack of expansion in coverage, it will increase costs and apply further burdens on the health care system, which is what is transpiring.
“Today we should remember that virtually everything government does is a ‘mandate.’ The issue is not whether Congress can compel commerce by forcing you to buy insurance, or simply compel you to pay a tax if you don’t,” said Dr. Paul. “The issue is that this compulsion implies the use of government force against those who refuse. The fundamental hallmark of a free society should be the rejection of force. In a free society, therefore, individuals could opt out of ‘Obamacare’ without paying a government tribute.”
It should also be noted that Austrian Economist Murray N. Rothbard pontificated that the formation of neoteric corporate medical insurance firms are the result of government intervention into the private market, which would continue to disenfranchise consumers and lead to unprecedented control by the insurance corporations and bureaucrats.
“Physician and hospital prices are high and are always rising rapidly, far beyond general inflation. As a result, the medically uninsured can scarcely pay at all, so that those who are not certifiable claimants for charity or Medicaid are bereft. Hence, the call for national health insurance,” wrote Rothbard
“But why are rates high and increasing rapidly? The answer is the very existence of healthcare insurance, which was established or subsidized or promoted by the government to help ease the previous burden of medical care. Medicare, Blue Cross, etc., are also very peculiar forms of ‘insurance.’”