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Side note: BCBS health insurance policy, with a $6,700 deductible, at this house; increased 9.8% for 2016. Our continued 30% of equity exposure investments in healthcare will help pay the costs, I'm thinking. Kinda a "play to pay" investment. Hey, a new name for a "fund".
Two years ago the BCBS premiums for my CPA firm in Michigan increased 55%, and that's after increasing the deductible two and a half times. The average increase for my small business clients here in Michigan two years ago (when we first had to comply with the ACA) was 47% to 55%. This past years our "only" increased 5%. These were great plans previously!
I hate these articles because they only reference the rate increases for those purchasing insurance from the govt marketplace, not the private marketplace. Those of us on the private marketplace (which is mostly small business owners) have been getting killed.
And what is going to happen to the rates when our govt stops subsidizing the insurance companies next year? Oh, don't worry, the Obama administration has found a backdoor way to circumvent Congress to keep these subsidies going; otherwise they know the system isn't sustainable.
Two years ago the BCBS premiums for my CPA firm in Michigan increased 55%, and that's after increasing the deductible two and a half times. The average increase for my small business clients here in Michigan two years ago (when we first had to comply with the ACA) was 47% to 55%. This past years our "only" increased 5%. These were great plans previously!
Obama belatedly afforded states the opportunity to grandmother new (i.e. post 2010) noncompliant plans, ultimately through 2017. Michigan was one of over 2/3 of the states that accepted this offer.
It sounds like it was your insurer that decided to jack up your rates. Small business rates in Michigan went up 20%-60% when small businesses transitioned to ACA plans, according to the Crain's article. Since your increase was at the high end of that range, it's understandable that your insurer would use any excuse to kick you off of your old plan.
I hate these articles because they only reference the rate increases for those purchasing insurance from the govt marketplace, not the private marketplace. Those of us on the private marketplace (which is mostly small business owners) have been getting killed.
Likewise, I hate anecdotal data, because it often represents worst cases. That's why I take review sites with a grain of salt.
Some small businesses were indeed slaughtered. Others had insurers that kept their grandfathered and grandmothered plans as they were allowed to do. Still others had sizeable first year hikes when moving to ACA plans, though generally less than yours. Crain's noted that last year the average non-ACA small business plan increased 10% (0-25%), while the ACA plans averaged less than that ("below 10%").
The DFP article text discussed individual plans, on or off the exchange. The text was sloppy here, saying that the 17.3% average rate increase requested was only for "Health plans sold on Michigan's insurance exchange."
There you'll see that the average increase requested by all insurers for individual plans is 17.3%. That includes both insurers that offer plans on-exchange (who likely also offer plans off-exchange) and insurers that offer plans exclusively off-exchange (like Aetna).
That data also shows the rate increases requested for small business plans. (Addressing your concern that the article said nothing about small business plans or private marketplace plans). The average rate requested for these plans is 2.6%, with five insurers requesting decreases, and only one insurer requesting a double digit increase.
And what is going to happen to the rates when our govt stops subsidizing the insurance companies next year? Oh, don't worry, the Obama administration has found a backdoor way to circumvent Congress to keep these subsidies going; otherwise they know the system isn't sustainable.
The DFP gave you some indication - it quoted an insurer as saying that the end of the reinsurance program accounts for more than 6% of the requested increase.
As one might infer from the comparable ACA and non-ACA increases in the Crain's article, the problem with rising rates is not due primarily to the insurance structure, but to the costs that are being insured. Agreed that this is not sustainable, ACA or not.
Comments
I hate these articles because they only reference the rate increases for those purchasing insurance from the govt marketplace, not the private marketplace. Those of us on the private marketplace (which is mostly small business owners) have been getting killed.
And what is going to happen to the rates when our govt stops subsidizing the insurance companies next year? Oh, don't worry, the Obama administration has found a backdoor way to circumvent Congress to keep these subsidies going; otherwise they know the system isn't sustainable.
" Blue Cross Blue Shield of Michigan was one of several insurers [in Michigan] that decided not to extend non-Obamacare-compliant health plan choices for 2015, forcing many clients of the state's dominant insurer to decide whether to purchase a more expensive ACA-compliant plan with the Blues or go elsewhere."
http://www.crainsdetroit.com/article/20160710/NEWS/160719982/some-businesses-get-option-to-keep-to-2018-non-aca-conforming-plans
It sounds like it was your insurer that decided to jack up your rates. Small business rates in Michigan went up 20%-60% when small businesses transitioned to ACA plans, according to the Crain's article. Since your increase was at the high end of that range, it's understandable that your insurer would use any excuse to kick you off of your old plan. Likewise, I hate anecdotal data, because it often represents worst cases. That's why I take review sites with a grain of salt.
Some small businesses were indeed slaughtered. Others had insurers that kept their grandfathered and grandmothered plans as they were allowed to do. Still others had sizeable first year hikes when moving to ACA plans, though generally less than yours. Crain's noted that last year the average non-ACA small business plan increased 10% (0-25%), while the ACA plans averaged less than that ("below 10%").
The DFP article text discussed individual plans, on or off the exchange. The text was sloppy here, saying that the 17.3% average rate increase requested was only for "Health plans sold on Michigan's insurance exchange."
This can be seen by looking at the data embedded at the end of the article. To make it more readable, here's the link to the original:
http://media.freep.com/uploads/business/2017_Health_Ins_Rate_Chg.pdf
There you'll see that the average increase requested by all insurers for individual plans is 17.3%. That includes both insurers that offer plans on-exchange (who likely also offer plans off-exchange) and insurers that offer plans exclusively off-exchange (like Aetna).
That data also shows the rate increases requested for small business plans. (Addressing your concern that the article said nothing about small business plans or private marketplace plans). The average rate requested for these plans is 2.6%, with five insurers requesting decreases, and only one insurer requesting a double digit increase. The DFP gave you some indication - it quoted an insurer as saying that the end of the reinsurance program accounts for more than 6% of the requested increase.
As one might infer from the comparable ACA and non-ACA increases in the Crain's article, the problem with rising rates is not due primarily to the insurance structure, but to the costs that are being insured. Agreed that this is not sustainable, ACA or not.