Higher insurance premiums are pummeling Texans in the age of Obamacare, and health-care analysts say ever-bigger increases are inevitable.
Texans are opting to pay the Obamacare tax penalty instead of digging deeper for coverage. Here’s the dirty little secret: Obamacare insurance premiums don’t buy the kind of coverage that protects most consumers – because insurers shift more and more health care costs onto their customers in the form of high deductibles.
“The law was never going to work. It’s actuarily unstable. Now the logical consequences are playing out,” said John Davidson, director of the Center of Health Care Policy at the market-oriented Texas Public Policy Foundation in Austin.
Premium costs for Texas’ giant Blue Cross/Blue Shield HMO are going up 18.7 percent plus deductibles are increasing. With 700,000 customers, the plan is one of the biggest in the state. In 2014, the HMO collected $2.1 billion in premiums, but claims were $2.5 billion under Obamacare.
“This is the transfer cost of a mandate onto individual policyholders,” Davidson told Watchdog.org.
Meantime, Humana’s Texas HMO jacked up its rate 23 percent when the federal Centers for Medicare and Medicaid Services required higher reserves for the 1,000-customer plan. Other plans in the state are charting increases of 20 percent to 30 percent.
As premiums and deductibles rise, so do the number of people dropping their health insurance and taking their chances.
With 19 percent still uncovered by health insurance—the most in the nation—more Texans are canceling policies. Individuals can opt out of the insurance mandate by paying a fine—$695 per adult or 2.5 percent of household income in 2016, whichever is higher.
“The more premiums go up, the more affordable it is to pay the penalty,” Davidson notes, even as Washington keeps ratcheting up the tax. The fine was 2 percent of income this year and 1 percent the year before.
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