You simply cannot force (negotiate) lower health insurance premiums. Sooner or later premiums must be sufficient to cover health care claims plus related administration. Pundits, regulators and politicians should know that … and they should tell you the truth … but they don’t.
While you may squeeze administrative costs, squeeze too hard and it is counterproductive; fraud, abuse and unnecessary costs increases result. Medicare is a good example of supposed low administrative costs and resulting rampant fraud often taking years to uncover.
Look at the sentences I have placed in red. There is a good bet part of that 13.2% increase is the result of rates being artificially kept low in 2016 and now they have to play catchup. Not covering all your costs in a year merely compounds the problem in subsequent periods. And by the way, it’s not necessarily overall medical costs that continue to climb, but rather the use of health care services by individuals enrolled in the health plans.
California’s Obamacare premiums will jump 13.2 percent on average next year, a sharp increase that is likely to reverberate nationwide in an election year.
The increase, announced by the Covered California exchange Tuesday, ends the state’s two-year respite from double-digit rate hikes.
The announcement comes as major insurers around the country seek even bigger rate increases for open enrollment this fall, and the presidential candidates clash over the future of President Obama’s landmark health law.
California won plaudits by negotiating 4 percent average rate increases the past two years for its 1.4 million enrollees. But that feat couldn’t be repeated for 2017, as overall medical costs continue to climb and two federal programs that help insurers with expensive claims are set to expire this year.
Health policy experts said California is rejoining the pack after outpacing much of the country during the launch of Obamacare.