Obamacare Taming Insurance Hikes
Posted on September 17, 2012 by admin
In addition to the provision of healthcare to those who could not afford it, the Affordable Care Act’s secondary goal was to limit the hikes of health insurance premiums. For years, insurance companies have been requesting higher and higher prices, and the state of California in 2013 gives you the best glimpse of the problem.
The Golden State’s Aetna division proposed a rate increase of approximately 22 percent for some of their clients last year. Anthem Blue Cross was no better, requesting a 26 percent rate hike. And back in 2010, Anthem Blue Cross is recorded to have asked for an even more stunning increase of 39 percent. It’s almost absurd to think that such proposals are commonplace.
However, early filings from insurers bring relatively glad tidings.
Reports indicate that premiums under the Affordable Care Act will only be rising by about 10 percent. Given the proposed hikes of years past, this is definitely a cause for relief. Of course, acknowledgment of the healthcare law’s success in this area would be premature at this point – as the final premiums haven’t yet been revealed by insurance companies – but it certainly isn’t far off if the reports are accurate.
As touched upon earlier, the Affordable Care Act was signed into law to cut down on the immense rate increases often proposed by insurance companies. And the way it has succeeded in doing so is likely thanks to two factors: competition and oversight.
The health insurance marketplace has provided a level playing field, where insurance companies compete for the business of millions. No one is going to choose the radically more expensive plan. Thus, premiums are stable and comparable. As it pertains to oversight, Obamacare has established mandatory reviews for every proposed rate increase larger than 10 percent. Such reviews, if called for, become public spectacles. And given the bad press associated with these reviews, insurance companies actively attempt to avoid them. Given their stiff competition, they can’t afford any sort of slip.
But limiting price increases isn’t the sole accomplishment of the Affordable Care Act in this area. Because of how easy it is to sign up for health care now, Obamacare has made it very simple to switch plans. This is especially handy if an insurance company decides to raise their premiums to ungodly heights. Now, policy holders can just switch out of that difficult situation and into a more affordable plan.
The promise of managing insurance premiums seemed lofty at first, but Obamacare is coming through in this regard. And while increases in rates were to be expected, as they come every single year, this manageable augmentation presents a much better alternative to what insurance companies like Aetna and Anthem Blue Cross typically propose.