by Ken Vincent, Columnist & Featured Contributor
[su_dropcap style=”flat”]W[/su_dropcap]ELL AS MANY of us predicted, it seems the economics of Obamacare are simply not sustainable.
The law doesn’t need a legal action, or revisions by congress, or a Supreme Court ruling to blow a hole in it. 2014 was the first full year of insurance issued through the federal and state exchanges and now the reality is beginning settle, in the form of requested rate increases for 2016.
Insurance carriers are requesting premium increase of 25-54% for 2016. Those are the highest rate increases in history. It seems that many of the insurance carriers paid out more than they collected in premiums in 2014. In some cases they paid out 135% of the collected premiums. Obviously that is not sustainable. No company can consistently pay out more than it collects in revenue and survive.
The insurance commissioner of Oregon, after reviewing the facts behind the requested rate increases there, actually told the insurance companies to ask for higher increases. Her justification for that unheard of action was that the carriers were destined to either go broke, or be forced to leave the state leaving no insurers in Oregon.
Of course, many of those that bought policies through the exchanges did so only with the financial help provided by government subsidies. The propose rate increase, however they settle, will have a major impact on those people, forcing many to drop their insurance and pay the penalty tax, or downgrade their coverage.
It seems that now in many cases the proposed new premiums will actually be higher for the same coverage than private policies offered before the ACA. Wow, what a deal. Those that followed the former Speakers of the House and Senate should hide their heads in a sack.