One Big Insurer Explains Why Obamacare Premiums are Rising

No matter what type of health insurance plan you are on, we all experience the ever increasing rise in health insurance premiums. Of particular interest to many who watch the health insurance industry has been the rise in individual premiums on the “exchanges.” As many industry observers have predicted, the individuals who are purchasing plans on the exchanges are often driving much higher costs than those outside the exchanges. The BlueCross and BlueShield Association just released a new study that helps explain why some big health insurers are struggling to make money under Obamacare — and have jacked up premiums in many cases.

The insurance giant’s newly covered customers were sicker, required more care and had higher medical costs than individuals who were already covered.

BlueCross looked at the medical services used by people who enrolled in its plans before and after the implementation of the Affordable Care Act in 2014. The study was based on claims for 4.7 million people.

Compared to the company’s previously insured population, new enrollees in individual BlueCross and BlueShield health plans in 2014 and 2015 were found to have higher rates of certain conditions and diseases, including hypertension, diabetes, depression, coronary artery disease, human immunodeficiency virus (HIV) and Hepatitis C.

HIV was more than three times as common among newly enrolled customers compared to those who already had coverage, the report found. Hepatitis C was more than twice as common.

The relatively poor health of people enrolled under Obamacare is not surprising given that many of the newly covered had gone without health insurance before and thus were not able to get medical treatment for their illnesses. That history also helps explain why newly enrolled consumers in 2014 and 2015 also used more medical services than those who had purchased coverage prior to 2014. In the first nine months of 2015, new enrollees filled 35 percent more prescriptions than those who had purchased coverage prior to 2014. Hospital admission rates jumped 84 percent higher, the report found, and the frequency of visits to doctors and other medical professionals shot up by 26 percent.

On top of the relatively poor health of those enrolled, the exchanges seem to be losing enrollment as well. The Congressional Budget Office projected in a report issued last week that about 12 million people will get their insurance through Obamacare exchanges this year, down from a projected 13 million as of January and a forecast of 21 million a year ago.

Ultimately, what sicker enrollees and smaller pools equate to? Higher premiums for all.

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