Health Insurers Say Premiums Under Obamacare Will Be Much Higher In Some Places Next Year

When Sec. Kathleen Sebelius
testified before Congress last week, she admitted that health
premiums would continue to rise under Obamacare, but claimed they
would not rise as fast as they were rising prior to the passage of
the law. “I think premiums are likely to go up,” said the
Health and Human Services chief, “but go up at a smaller pace than
what we’ve seen since 2010.” 

But health insurance industry sources tell The Hill
that
big premium hikes are on the way in some areas: 

Health industry officials say ObamaCare-related premiums will
double in some parts of the country, countering claims recently
made by the administration.

The expected rate hikes will be announced in the coming months
amid an intense election year, when control of the Senate is up for
grabs. The sticker shock would likely bolster the GOP’s prospects
in November and hamper ObamaCare insurance enrollment efforts in
2015.

There’s going to be a lot of variation. Some states and regions
will see very large hikes. Others will see minimal change.

Part of that is because of the way insurance markets are split
up by state, which means that states with underperforming exchanges
or bad enrollment demographics will likely fare differently than
those with more robust, healthier enrollment. Another part of it is
pricing strategy for the launch years. 

Some insurers initially underpriced their policies to begin
with, expecting to raise rates in the second year. 

Others, especially in larger states, will continue to hold rates
low in order to remain competitive.

It’s also a result of changes the administration has made to
Obamacare, which have been designed to help the law politically,
but were always likely to cause policy problems later on. 

Insurance officials are quick to emphasize that any spikes would
be a consequence of delays and changes in ObamaCare’s
rollout. 

They point out that the administration, after a massive public
outcry, eased their policies to allow people to keep their old
health plans. That kept some healthy people in place, instead of
making them jump into the new exchanges.

Federal health officials have also limited the amount of money
the government can spend to help insurers cover the cost of new,
sick patients. 

If the Obama administration’s political fixes end up leaving
people with dramatically higher premiums, you can probably expect
more political problems down the road.