Why Are Health Insurance Premiums Still Rising After The Patient Protection and Affordable Care Act?

Since no one seems willing to discuss the real reasons that health insurance premiums are increasing dramatically since the passage of the PPACA (Patient Protection and Affordable Care Act). Let me break down the 3 primary reasons. They are as follows:

1.) My Blue Cross Group clients are receiving 35.63% renewal rate increases this year for the first time in 15 years. Their prior premium increases were no where near this amount. This is not isolated to Blue Cross either. These premium increases are happening in many markets across the United States in both the Individual and Group markets. I’m simply using Blue Cross as an example since the name is most widely recognized. These increases are due in large part to the fact that multiple new “Preventative Care” mandates were imposed upon all “non-grandfathered” health insurance plans as of 9/23/2010 under the PPACA. A “Non-grandfathered” plan is a plan that was purchased after the PPACA (a.k.a “Obamacare”) was signed in to law on March 23, 2010. Keep in mind, these were all mandated to be covered no later than 1/1/2011 without a co pay or a deductible required. See list of mandates http://www.healthcare.gov/law/about/provisions/services/lists.html

2.) Multiple new policy design changes have also been mandated. If you have a Group health plan you’ve already received those new mandates.

3.) Now we come to reason number three. The new PPACA mandated Medical Loss Ratios or “MLR’s”. This is why health insurance premiums are increasing on Non-Grand-Fathered plans as well. For more about the new MLR’s visit: http://www.heritage.org/Research/Reports/2010/01/Squeezing-out-Private-Health-Plans Who in their right mind thinks forcing all the following new mandates on to every health insurance policy in the country would actually “bend the cost curve down“?

In fact, mandates are a major reason why health insurance premiums have been increasing exponentially over the last few decades. In 1979 there were 252 mandates in force in health care, by 2007 there were nearly 1900. With the implementation of the PPACA we have tipped the scales at nearly 2000 mandates. Keep piling them on and costs will continue to rise.