When we warned recently that thanks to Obamacare, insurance companies would be unveiling significant price shocks one week before the presidential elections, we knew it was only a matter of time before the 2017 proposals would start to be released and double digit increases would be unveiled to the public.
Sure enough, we were proven right when the first two states to release proposals, Oregon and Virginia, showed that insurers were indeed asking for significant double digit increases.
Now, another state has made the 2017 proposals public, and the results aren't any better. In New York, health insurers have proposed an average 17.3 percent increase for individuals, and an average 12 percent increase for small groups. In the individual market there is a wide range of increases, from MVP Health asking for a 6.1 percent increase, to Crystal Run Health Plan asking for a whopping 89.1 percent increase. For small groups, Healthfirst Health Plan has proposed a 5 percent increase on the low end, while Crystal Run has proposed a 61.9 percent increase on the high end.
"The 2017 rate submissions reflect increases that are the direct result of the underlying cost of care and marketplace changes that continue to impact health plans' operations," said Paul Macielak, president of the New York Health Plan Association.
Other proposed rate increases for individuals include 45.6 percent increase by United Healthcare of New York, 29.2 percent increase by North Shore-LiJ CareConnect, and 15.9 percent by Excellus.
While on average a 17.3 percent increase has been proposed for individuals, it's important to note that in 2015 the Department of Financial Services only approved an increase of 5.7 percent even as the companies proposed a 12.5 percent increase.
Obamacare now finds itself at an interesting crossroads. On one hand, as evident in the proposed increases, very few companies can make a profit while participating in Obamacare with rates at current levels. Companies set up specifically under the Affordable Care Act have started to shut their doors (losing taxpayers billions) because there is simply no profit to be made, and now the government is even walking back promises to compensate firms that agreed to participate for their losses. Indeed, if the higher rates are not approved, firms will continue to exit the healthcare exchanges. However, if rate increases are approved, another problem is presented. Increased costs would put further pressure on already financially strained individuals and small business owners who would have to come up with ways to absorb the additional costs.
Ironically, the guy primarily responsible for creating such a mess won't have to deal with any of this come January 20, 2017.
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