For those using the exchanges, Obamacare rates are set to jump more than they ever have since Obamacare started.
For those on the healthcare exchanges, Obamacare rates will jump up for many people by over a third. For some, they will rise by almost half again. New Mexico has never seen rate hikes like this before. Of course, some will get subsidies so they won’t complain as much while the Federal budget deficit climbs higher. But many will be left with a huge financial hole next year!
The Washington Free Beacon reports, “Health Insurers in New Mexico To Implement Record-High Premium Increases.”
Insurers will increase premiums next year from a range of 36 to 41 percent for midlevel insurance plans. For all plans, premiums are expected to rise a range of 17 to 49 percent.
“I feel sorry for the other 40 percent though,” said John Franchini, the state’s insurance superintendent.
The Free Beacon’s source is the Albuquerque Journal’s, “Insurance rate hike sets record for New Mexico exchange,” which also reports that Insurance Companies might reap big profits, but if they do they probably won’t reduce rates.
Raising premiums gives insurers more confidence to participate in the market by protecting them from major financial losses, said Franchini. At the same time, if the Trump administration continues to make the CSR reimbursements (or if Congress steps in to appropriate the necessary funds), these insurers could potentially reap a windfall, financed largely by federal taxpayers who pick up the tab for the cost-sharing program.
If the CSRs do come through, could the rate hikes be rolled back? “I cannot guarantee that will happen in New Mexico,” Franchini said, adding that insurance and medical companies “don’t do well” with revising contracts once they’re signed.
They also reveal that the ultimate cause of rising rates is the “death spiral.”
Franchini said rates are rising because not enough people are buying insurance through New Mexico’s federally subsidized marketplace.
So, prices are going up because of fewer customers—especially healthy ones who can pay for the sick ones. But higher prices will drive more people out of the market, especially if they are relatively healthy!
But when Donald Trump said he wanted to repeal Obamacare, the local media claimed that would we be disastrous for New Mexico:
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