Recent moves by insurance companies, to seek double-digit rate increases in New York, Connecticut and Washington State are prompting some Republicans to point an accusing finger at the new health care law passed by the Obama Administration earlier this year. However, many within the industry, as well as regulators and health care experts insist that the real and bigger problem has to do with rising health care costs.
An increasingly vocal group of Republican lawmakers have recently claimed that the new healthcare law is primarily responsible for driving the substantial premium increases being sought by insurers in these three states. John Boehner (R-OH), who is slated to be the next Speaker of the House cited a report by the Kaiser Family Foundation to predict that health premiums will skyrocket in future because of the law. Similarly, Senate Minority leader Mitch McConnell (R-KY) claimed on his Website that the law has resulted in “whopping” premium hikes in some states, based on a media report out of Washington State.
The reality however is a bit more nuanced, according to several others. The Kaiser report quoted by Boehner for instance, refers to price increases before the new law even went into effect. Similarly, the increase mentioned in the media report that was quoted by McConnell, had nothing to do with health care reform, according to Washington State’s insurance commissioner. Importantly, the premium increases cited by both lawmakers pertain largely to those purchasing new individual polices and not to the vast majority of others who get their coverage via their employers. Barely six percent of the premium paying public is affected by the increases according to regulators and the insurers themselves. Most employer-covered health plans will remain largely untouched by the premium hikes for the short-term at least.
According to analysts and experts at the National Association of Insurance Commissioners and state commissioners’ office, the Patient Protection and Affordable Care will push premiums up by a maximum of 3% to 5%. The rest of the premium hikes that are being sought are the result of the increasing costs of delivering healthcare. According to an analyst at the Washington StateCommissioner’s office, rising healthcare costs on the other hand are driving up premiums by over 13% for individual plans and close to 16% for small group plans. In New York, for instance, Aetna Health Inc has said it plans to raise premiums by between 12% and 15% because of rising costs. The insurer says it may charge another 4% hike because of the healthcare law.
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