Affordable Care Act increasing insurance rates

On March 26, the Obama administration’s Affordable Care Act health care reform package goes to the U.S. Supreme Court, which has scheduled an historic three days of arguments. The outcome remains to be seen. 67% think the Supreme Court should either strike it down completely, or at least repeal the part that requires them to buy insurance or pay a penalty.

At the heart of the case is the constitutionality of the law’s “individual mandate requirement,” which requires virtually every American to purchase minimum health care coverage or else pay a tax penalty.

Mr. Holtz-Eakin, a former director of the Congressional Budget Office claims that the insurance mandate has almost nothing to do with remedying costs imposed on the system by those without coverage.

With the financial impact on future insurance costs several insurance companies have already begun raising price increases and are being scrutinized by state insurance departments.

Anthem Blue Cross California’s largest for-profit health insurer will raise rates 8.2% on average, down from its earlier request of 10.4%. The maximum rate hike will be 20% instead of 30%, according to the California Department of Insurance.

Trustmark Life Insurance Company and United Healthcare in Utah want to raise insurance rates.

WellPoint Inc., the nation’s second-largest health insurer with 34 million members, has said it will spend $100 million this year on technology upgrades to meet the law’s requirements. Aetna Inc., third-largest U.S. health insurer with more than 18 million members, says it expects to spend $50 million this year in part to upgrade software and computers.

States now have broad discretion in determining whether increases are fair or exorbitant. How Utah treats the Trustmark and United filings could signal how heartily regulators embrace their new enforcement role.

Last year, the Illinois-based insurer proposed rate hikes of 13 percent in five states that were deemed “unreasonable” by federal officials. The insurer was spending a low percentage of premium dollars on actual medical care and its projected costs were based on unreasonable assumptions, officials said.

Trustmark says bumping rates in Utah is “necessary to ensure the continued financial soundness” of the company, according to an explanation provided the state.

Regardless of the real impact this will have on health insurance in the United States, it is the Supreme Court that will have the final say and decide this.

Paul King and Charlotte Hildebrandt
1650 Albright Ln #101
Boise, Idaho 83709


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