BY JANE WOODRUFF
Soaring insurance rates are one of the things the Affordable Health Care Act (ObamaCare) was designed to address. However, many insurance companies are trying to raise their rates on customers by double digits – in some cases by over 20%.
In California, Anthem Blue Card PPO raised their rates on some customers by 39% in 2010. Now, just 3 years later, they want to raise it again by 26%. Can they get away with that? Because of a glaring loophole ObamaCare, they can.
As reported by The New York Times, any request for a rate increase of more than 10% must be reviewed by regulators. However, these regulators don’t always have the power to deny the request. Only in 37 states are they able to tell the insurance companies no. California is one the states where regulators must review, but have no power to deny, hefty rate increases. Dave Jones, a California insurance commissioner, says that without a federal law to let states deny rate increases, this loophole will continue to allow the insurance companies to raise rates at their own discretion.
At health.gov you can find out about your insurance company and any rate increase plans. Many companies in New Jersey have been reviewed and their rate increases of 14% or more have been deemed reasonable.
The health insurance industry continues to be quite profitable. As reported at Marketplace.org, UnitedHealth Group posted at 23% jump in profits for the third quarter of 2012. So, despite increased costs, the companies still make handsome earnings. Part of ObamaCare, Medical Loss Ratio, insists that 80% of the premium dollars insurance companies take in must be spent on health care costs and health care improvement activities. If they are not, they must provide refunds to policy holders. On this health.gov page, you can check on your insurance company and find out how they are spending your money.
Insurance companies insist that increases are necessary to keep pace with increased costs. As of 2014, they will no longer be able to charge more for certain “high-risk” customers. On the other hand, they will have a larger pool of customers paying premiums, because of the mandate that all citizens carry insurance.