If you’re wondering just how affordable healthcare will be under the Affordable Care Act (ACA), consider this: Maryland’s largest insurer just proposed, on average, a 25-percent rate hike for individuals next year, with much of that increase directly attributable to the ACA’s mandates.
CareFirst BlueCross BlueShield, which insures about 70 percent of Marylanders who buy insurance on the individual market — 120,000 people — submitted its proposed rates to the Maryland Insurance Administration. The agency then posted the proposals on its website as required for those carriers seeking to sell coverage on the state’s insurance exchange. (Maryland is one of 24 states plus the District of Columbia that have opted to set up their own exchanges, either alone or in partnership with the federal government.)
The huge premium increase — CareFirst’s rates have risen about seven to 10 percent annually in recent years — “is the practical result of opening the pool to everyone,” CareFirst CEO Chet Burrell told the Baltimore Business Journal. That is, by forcing insurers to accept all comers and charge them the same rates regardless of pre-existing conditions, ObamaCare has vastly increased insurers’ liability, and the only way for them to remain solvent under such conditions is to charge their customers significantly higher rates.
Not all CareFirst customers will be affected equally. The 60 percent whose plans aren’t changing next year will experience smaller increases because they will be exempt from some of the ACA’s requirements; but as soon as their plans do change, these people can expect to see their rates skyrocket, too.
Customers who have been paying low premiums because they are healthy can expect to pay much more in order to foot the bill for the benefits the newly insured sick will begin collecting. Those who have purchased relatively inexpensive catastrophic plans with high deductibles will also see significant increases because ObamaCare essentially outlaws such plans by mandating a wide variety of benefits.
The biggest determining factor in how much one’s premiums rise may be age. The ACA requires insurers to charge their oldest customers no more than three times as much as their youngest ones. Since insurers end up spending about six times as much on each old person as on each young person, this can mean only one thing: Rates on the young are going to go through the roof. CareFirst is estimating that older individuals may experience slight decreases in their premiums next year but that younger ones could find themselves paying as much as 150 percent more.
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