As the country awaits a ruling from the Supreme Court on the validity of Obamacare subsides in much of the U.S., health insurers are requesting big rate increases for 2016. Dozens of insurance companies are vying for double-digit premium hikes next year, some of which are sure to cause problems for low-income customers. The most cited reasons for the increases include higher-than-expected costs from new patients and rising prescription drug costs.
Blue Cross and Blue Shield in North Carolina is looking to raise premiums by 26 percent in 2016. Insurance companies in Florida and Illinois are seeking increases north of 20 percent as well. One insurance company in Pennsylvania – Highmark Health – is looking for a 30 percent raise. And then there’s BCBS of New Mexico, which wants to raise premiums by a stunning 50 percent next year.
These rates increases aren’t automatic, and they do not take into consideration a ruling against subsidies. Even if the Supreme Court sides with the administration in King v. Burwell, these increases will have to be approved by regulators before they are presented to the public. Customers should have a firmer idea of what they will pay as we get closer to open enrollment in November.
In the meantime, these proposed rate hikes cannot come as good news for the Obama administration. A recent survey showed that 44 percent of California’s insured “find it difficult” to pay their premiums as they are. Roughly the same percentage of uninsured Californians say that the cost of coverage is the reason they have chosen to go without. If rates skyrocket in the next year or two, Obamacare’s success in insuring the uninsured may begin to crumble. And that’s one of the only “victories” Obama can claim.
All of this uncertainty provides Republicans with a golden opportunity to make Obamacare a central issue of the 2016 primaries. When Americans realize that the last couple of years of the ACA were just a bait-and-switch, they are going to demand something be done. For liberal Democrats, that will mean trying a single-payer system of universal healthcare. For conservatives, it will mean devising a healthcare law that gives more power to the private market and more freedom to the individual.
If the Supreme Court strikes down subsidies in those states that failed to set up their own exchanges, it’s game over for the Affordable Care Act. If they side with the administration, it’s a jump ball. In either scenario, Republicans have to be ready with a marketable alternative that won’t throw the country into chaos. If done right, the Obamacare fiasco could give conservatives an unprecedented opportunity to say, “No, look here…this is how it’s done.” But if they drop the ball, it could lead us straight to the kind of socialized medicine that Obama wanted in the first place.
So don’t choke, GOP.