How Expensive Will Exchange Insurance Be?
California insurance officials have expressed concern about substantial rate hikes for some existing policyholders going into the exchange.
Under a new rating map approved by state lawmakers, the Department of lnsurance estimated that premiums for similar coverage could increase as much as 25% in West Los Angeles, 22% in the Sacramento area and nearly 13% in Orange County.
LA Times. HT: Tyler Cowen.
Wow, hard to see how people are going to be able to afford exchange insurance.
does everyone that already has insurance need to be in the exchange?
I’m confused — why are rates going up so much?
Can’t we opt out? I feel like I follow this more than the average person and am still poorly informed about the mandates…
That’s definitely true. I need to read up on this — it’s so unfair that people will have to pay more and very possibly receive less.
“The mandate as currently constituted probably won’t work.” – I agree with Tyler on this
“Experts said average premiums could rise in the exchange because the Affordable Care Act requires improved benefits, but consumers’ out-of-pocket medical costs could decrease under those same changes.”
The second part of that sentence is a little reassuring. I’m sure we’ll see the real impact soon.
At best, this is an unintended consequence.
Welcome to the new California Risk Pool!!
How can insurers which do not “qualify” for the exchange compete with insurers yhat do?
I assume subsidies are available only for those insurers in the exchanges.
Don Levit
Only the rich and famous can afford to live in California…so far.
We need to hear from someone who sells actual health insurance, namely me.
The individual insurance market in most states has allowed carriers to sell policies that exclude childbirth.
This holds premiums way down for younger people, since childbirth is the major cause of claims for women under age 35.
This does sometimes lead to painful consequences, when a couple that has such insurance is still forced nearly into bankruptcy by an uncovered pregnancy.
Anyways, the ACA would force all carriers to cover childbirth. This by itself will raise rates at least 20% for younger insureds.
The ACA is also supposed to provide subsidies based on income.
Therefore, in its design, the ACA would operate as follows:
A couple now pays $500 a month but has no maternity coverage.
The ACA rules force the premium up to $800 a month.
But the ACA subsidies mean that a couple with an income of $50,000 will only pay a net premium of $400 a month.
I am NOT saying that this will work. But I am saying that you should present the ACA as a whole piece, and not just take potshots at the most troublesome parts of it.