Obamacare to increase rates by up to 146% in California
Yes you read that right, insurance rates could increase by 146% in California thanks to the new healthcare bill that is currently being implemented. While the bill was sold as a way to cut rates and help people pay for healthcare in a more affordable way it is now doing just the opposite. In fact in most cases it is causing rates to skyrocket from 25 to now 146 percent (64% to 146% in CA alone) according to this new story from Forbes “The Apothecary” by Avik Roy (who you should follow on twitter here).
Obamacare “Slight of Hand” to hide rate hikes?
Last week, the state of California claimed that its version of Obamacare’s health insurance exchange would actually reduce premiums. “These rates are way below the worst-case gloom-and-doom scenarios we have heard,” boasted Peter Lee, executive director of the California exchange.
The data that Lee released tells a different story: Obamacare, in fact, will increase individual-market premiums in California by as much as 146 percent.
Lee’s claims that there won’t be rate shock in California were repeated uncritically in some quarters. “Despite the political naysayers,” writes my Forbes colleague Rick Ungar, “the healthcare exchange concept appears to be working very well indeed in states like California.” A bit more analysis would have prevented Rick from falling for California’s sleight-of-hand.
How did California get it so wrong?
Here’s what happened. Last week, Covered California—the name for the state’s Obamacare-compatible insurance exchange—released the rates that Californians will have to pay to enroll in the exchange.
“The rates submitted to Covered California for the 2014 individual market,” the state said in a press release, “ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”
That’s the sentence that led to all of the triumphant commentary from the left. “This is a home run for consumers in every region of California,” exulted Peter Lee.
Except that Lee was making a misleading comparison. He was comparing apples—the plans that Californians buy today for themselves in a robust individual market—and oranges—the highly regulated plans that small employers purchase for their workers as a group. The difference is critical.
With money already tight for most people in the United States and many business worried about paying for insurance for all employees it begs the question. Can we really afford Obamacare and the massive rate hikes related to it?