Why Are Health Insurance Premiums Still Increasing After The PPACA?

The Obama administration and more specifically HHS Secretary Kathleen Sebellius is repeatedly stating that the reason 6 million health insurance policies are being terminated as of December 30, 2013 is because these policies are ‘skinny plans’ or plans that have large coverage ‘gaps’. She has also stated that the individual and family health insurance market is the ‘Wild West’. In other words a largely unregulated market where consumers can be taken advantage of by unscrupulous insurance companies offering plans that are unregulated and harmful. This could not be further from the truth. Below are the mandated coverage requirements that have already been placed in force upon all policies sold on the market since 9/23/2010 under the PPACA – Patient Protection and Affordable Care Act (Obamacare). In other words, these policies are already PPACA compliant. Yet it is these policies, sold after 9/23/2010 that are being canceled all over the country even though they are already PPACA compliant!

It is also because of the addition of all of the PPACA mandated policy changes listed below that premiums have increased so significantly (as Table 1 illustrates) since 9/23/2010. As you examine all of the mandated coverage parameters below, think for yourself, does this look like the “Wild West”? An unregulated market of limited benefit plans where consumers can be taken advantage of? In fact, it is far from it.

Source: http://www.heritage.org/research/reports/2013/10/enrollment-in-obamacare-exchanges-how-will-your-health-insurance-fare#.UmLMYB-ENzA

1) My Blue Cross Group clients have received policy renewal rate increases since the passage of the PPACA of up to 46% for the first time in 17 years. See just a few of them here. Their prior premium increases were nothing near this amount. This is not isolated to Blue Cross either. These premium increases are happening in many markets across the United States in both the Individual and Group health insurance markets because of all the PPACA mandated coverage parameters. Even though Barack Obama promised “my health care plan will save the average family $2,500 on their premium.”

And then their was this quote from Barack Obama: “It’s estimated that your employer’s premiums will fall by as much as 3,000% which means they could give you a raise.”

These premium increases are due to the fact that multiple new “Preventative Care” mandates were imposed upon all “non-grandfathered” health insurance plans as of 9/23/2010 under the PPACA (Patient Protection & Affordable Care Act). A “Non-grandfathered” health insurance plan is a plan that was purchased after the PPACA (a.k.a “Obamacare”) was signed in to law on March 23, 2010. It is 14 million of these individual and family policies that will be terminated before December 30, 2013 even though they are already ‘Obamacare compliant”. Keep in mind, that all of the charges below were mandated to be covered on all individual and family policies no later than 1/1/11 WITHOUT a co pay or DEDUCTIBLE. The entire list is as follows:

• 15 Covered Preventive Services for Adults:

  1. Abdominal Aortic Aneurysm one-time screening for men of specified ages who have ever smoked
  2. Alcohol Misuse screening and counseling
  3. Aspirin use for men and women of certain ages
  4. Blood Pressure screening for all adults
  5. Cholesterol screening for adults of certain ages or at higher risk
  6. Colorectal Cancer screening for adults over 50
  7. Depression screening for adults
  8. Type 2 Diabetes screening for adults with high blood pressure
  9. Diet counseling for adults at higher risk for chronic disease
  10. HIV screening for all adults at higher risk
  11. Immunization vaccines for adults–doses, recommended ages, and recommended populations vary:
      • Hepatitis A
      • Hepatitis B
      • Herpes Zoster
      • Human Papillomavirus
      • Influenza (Flu Shot)
      • Measles, Mumps, Rubella
      • Meningococcal
      • Pneumococcal
      • Tetanus, Diphtheria, Pertussis
      • Varicella
        Learn more about immunizations and see the latest vaccine schedules.
  12. Obesity screening and counseling for all adults
  13. Sexually Transmitted Infection (STI) prevention counseling for adults at higher risk
  14. Tobacco Use screening for all adults and cessation interventions for tobacco users
  15. Syphilis screening for all adults at higher risk

  22 Covered Preventive Services for Women, Including Pregnant Women

  1. Anemia screening on a routine basis for pregnant women
  2. Bacteriuria urinary tract or other infection screening for pregnant women
  3. BRCA counseling about genetic testing for women at higher risk
  4. Breast Cancer Mammography screenings every 1 to 2 years for women over 40
  5. Breast Cancer Chemoprevention counseling for women at higher risk
  6. Breastfeeding comprehensive support and counseling from trained providers, as well as access to breastfeeding supplies, for pregnant and nursing women*
  7. Cervical Cancer screening for sexually active women
  8. Chlamydia Infection screening for younger women and other women at higher risk
  9. Contraception: Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling, including abortifacient drugs – some religious organizations are now exempt from this mandate
  10. Domestic and interpersonal violence screening and counseling for all women*
  11. Folic Acid supplements for women who may become pregnant
  12. Gestational diabetes screening for women 24 to 28 weeks pregnant and those at high risk of developing gestational diabetes
  13. Gonorrhea screening for all women at higher risk
  14. Hepatitis B screening for pregnant women at their first prenatal visit
  15. Human Immunodeficiency Virus (HIV) screening and counseling for sexually active women*
  16. Human Papillomavirus (HPV) DNA Test: high risk HPV DNA testing every three years for women with normal cytology results who are 30 or older
  17. Osteoporosis screening for women over age 60 depending on risk factors
  18. Rh Incompatibility screening for all pregnant women and follow-up testing for women at higher risk
  19. Tobacco Use screening and interventions for all women, and expanded counseling for pregnant tobacco users
  20. Sexually Transmitted Infections (STI) counseling for sexually active women
  21. Syphilis screening for all pregnant women or other women at increased risk
  22. Well-woman visits to obtain recommended preventive services

  26 Covered Preventive Services for Children

  1. Alcohol and Drug Use assessments for adolescents
  2. Autism screening for children at 18 and 24 months
  3. Behavioral assessments for children of all ages
     Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17 years.
  4. Blood Pressure screening for children
     Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17 years.
  5. Cervical Dysplasia screening for sexually active females
  6. Congenital Hypothyroidism screening for newborns
  7. Depression screening for adolescents
  8. Developmental screening for children under age 3, and surveillance throughout childhood
  9. Dyslipidemia screening for children at higher risk of lipid disorders
     Ages: 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17 years.
  10. Fluoride Chemoprevention supplements for children without fluoride in their water source
  11. Gonorrhea preventive medication for the eyes of all newborns
  12. Hearing screening for all newborns
  13. Height, Weight and Body Mass Index measurements for children
      Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17 years.
  14. Hematocrit or Hemoglobin screening for children
  15. Hemoglobinopathies or sickle cell screening for newborns
  16. HIV screening for adolescents at higher risk
  17. Immunization vaccines for children from birth to age 18 —doses, recommended ages, and recommended populations vary:
      • Diphtheria, Tetanus, Pertussis
      • Haemophilus influenzae type b
      • Hepatitis A
      • Hepatitis B
      • Human Papillomavirus
      • Inactivated Poliovirus
      • Influenza (Flu Shot)
      • Measles, Mumps, Rubella
      • Meningococcal
      • Pneumococcal
      • Rotavirus
      • Varicella
        Learn more about immunizations and see the latest vaccine schedules.
  18. Iron supplements for children ages 6 to 12 months at risk for anemia
  19. Lead screening for children at risk of exposure
  20. Medical History for all children throughout development
      Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17 years.
  21. Obesity screening and counseling
  22. Oral Health risk assessment for young children
      Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years.
  23. Phenylketonuria (PKU) screening for this genetic disorder in newborns
  24. Sexually Transmitted Infection (STI) prevention counseling and screening for adolescents at higher risk
  25. Tuberculin testing for children at higher risk of tuberculosis
      Ages: 0 to 11 months, 1 to 4 years, 5 to 10 years, 11 to 14 years, 15 to 17 years.
  26. Vision screening for all children
      Source: https://www.healthcare.gov/what-are-my-preventive-care-benefits

2.) Now for the policy “design” mandates. Including the requirement that all plans cover an unlimited lifetime maximum coverage amount for all insured members on policies sold after 9/23/10.
http://www.resourcebrokerage.com/BCBSupdates22510B/PPACAILInsuredNotification.pdf

3.) The recent inclusion of PPACA mandated “Essential Health Benefits” on group health plans. Among these are the following:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care
  Source: http://www.uhc.com/united_for_reform_resource_center/health_reform_provisions/essential_health_benefits.htm

Starting on 1/1/14 all individual and family policies will also have to include the aforementioned 10 “Essential Health Benefits” under the PPACA. The majority of individual health plans on the market today already include 8 or even 9 out of the 10 ‘Essential Health Benefits’ that we are told they need and to not have so they have to be canceled in order not to be ‘substandard’ plans. They must also cover all preexisting conditions without proof of prior coverage. The truth is the vast majority of health insurance policies available on the individual and family market prior to the PPACA already included many of these “Essential Health Benefits”. But even for those that did not, the aforementioned facts prove that the individual and family health insurance market is far from what the Obama administration is falsely calling the “Wild West”. Both the Group and Individual and Family health insurance market has been the most regulated industry in America for decades before the PPACA was passed. It is even more regulated since 9/23/2010 and yet it these PPACA compliant individual and family policies that are being terminated on December 30, 2013. And, the plans that are being offered to these policy holders as a replacement are even more expensive according to main stream media outlets like:

CBS: A charter member of the Main Stream Media finally reports on 2 million Americans who have already lost their health plans:

CBS: They finally report on the true cost of Obamacare approved health insurance:

CBS News: Also reporting on hundreds of thousands losing their health insurance plans because of Obamacare:

CBS News: “Obamacare resulting in dropped coverage and higher premiums.

NBC News: Consumers facing sticker shock and policy cancellation notices due to Obamacare.

Kaiser Health News: Thousand of consumers getting insurance cancellation notices due to health law changes.

NBC News: Thousands getting health insurance cancellation notices.

NBC News: Half a million Californians losing their health insurance plans because they don’t comply with Obamacare.

Millions of individual and family health insurance plans have already been terminated and 16 million more Americans will soon lose their individual health insurance plans because of Obamacare.

The worst part about all of this is that NBC News is now reporting that President Obama knew, as early as July of 2010 that millions of Americans would lose their health insurance plans because of his health care law:

Below is a photocopy of a page of the federal register that proves that the Obama administration knew in 2010 that millions of Americans would lose their Individual & Employer Sponsored health insurance plans because of Obamacare. This regulation was written on purpose so that millions of existing policy holders would be forced to purchase health insurance inside the exchanges instead. The forced addition of millions of these policyholders – all who were assured by president Obama that they could ‘keep their plan‘ – will lower the cost or further subsidize the high cost of insuring sick people who will most certainly be purchasing subsidized health insurance inside the exchanges. In other words this was a deliberate action taken by HHS and a direct violation of the president’s promise.

4.) The onerous PPACA mandated Medical Loss Ratios or “MLRs”. This is another reason why health insurance premiums are increasing on “Non-Grand-Fathered” health insurance plans – plans purchased after the passage of the PPACA. For full details on these I refer you to the following link from the Heritage Institute. http://www.heritage.org/Research/Reports/2010/01/Squeezing-out-Private-Health-Plans

This MLRs have left hundreds of thousands of American’s either uninsured or without the plan they had prior to the passage of the PPACA. Here is a sample letter that many of my clients received when Guarantee Trust Life insurance company ceased providing health insurance to my clients around the country in 2010.

This is exactly the opposite of what President Obama promised when he said in his speech to the AMA on June 15, 2009 “If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.” Watch him repeat this lie over, and over again below:

Find out the names of the carriers that have left the industry since the passage of the PPACA as well as all the other damage done to the health insurance industry since the passage of the PPACA by reading the study completed by the Galen Institute on December 1, 2011 entitled “A Radical Restructuring of Health Insurance.”

World Insurance company in Omaha, Nebraska and it’s subsidiary American Republic insurance company is the latest carrier to succumb to the PPACA’s onerous MLR – Medical Loss Ratio requirement. They have now exited the individual market due to the PPACA Medical Loss Ratios. This move left 35,000 former policy holders without their plans. Sadly, the exit of American Republic from the Individual health insurance market also left 110 former employees without a job. Read that story here. Both companies will be purchased by Celtic Insurance company of Chicago Illinois.

This is not an isolated incident in Iowa. Iowa’s Principle Financial Group also exited the health insurance market, leaving 840,000 policy holders without their health insurance plans. Principle was purchased by United Health Group. Thankfully, due to this purchase, United Health Group will be offering new coverage to those formerly insured with Principle Financial Group. Again, you can not keep your plan, even if you like it. President Obama lied. And, as these larger companies gobble up smaller companies, competition is stifled resulting in higher premiums, less choices for consumers and a rapidly growing monopoly.

Other companies that have either closed their doors entirely or stopped selling health insurance since Obamacare was signed into law are as follows:

1.) American National
2.) American Republic
3.) American Medical Security
4.) American Community Mutual – entire block purchased by United Healthcare
5.) Standard Life & Accident
6.) Principle Financial
7.) nHealth
8.) World Insurance
9.) Unicare
10.) Guarantee Trust Life
11.) Coventry – rebranded and selling again in 2014 after acquisition by Aetna
12.) Physicians Benefit Trust
13.) Independence Holding Group
14.) Assurant Health – entire block purchased by National General Holdings Corporation
15.) Humana – entire block purchased by Aetna
16.) United Healthcare – out of the exchanges and no longer selling PPACA products
17.) Healthnet – gobbled up by Centene corporation.
18.) Aetna – out of exchanges and no longer selling PPACA products
19.) Harken Health out of business after losing $26 million in one year.
20.) Wellmark – OUT of Obamacare exchange.

Let’s not forget that 20 of the 24 Obamacare ‘co-op’ health insurers are now bankrupt.

Other carriers are slowly withdrawing State by State. Page 7 of this white paper dated September 6, 2011 from the North Carolina Department of Insurance details exactly why the majority of all health insurance carriers that offered health insurance in their State have already exited and why even more are considering doing so shortly.

Millions more Americans will lose their Employer Sponsored health insurance after 2014. This is due to the fact that the ‘fine’ (Roberts Tax) on employers – with 50 or more more full time employees – who do not offer HHS approved health insurance to their employees is only $2,000 annually. This is far less than the cost to provide health insurance. So, many employers will simply choose to pay the ‘fine’ and push their employees onto the ‘health insurance exchanges’. For the full impact of the PPACA “Roberts Tax” on Individuals, Taxpayers & Employers visit this link.

UPDATE: Even though Barack Obama has now delayed this onerous mandate on employers until 2015 the ramifications have already been realized in the latest jobs report with a massive increase in part time workers.

Historical precedent proves that forcing mandate after mandate and new regulation after regulation on to the health insurance industry does nothing but increase costs. In 1979 there were 252 mandates forced upon the health insurance industry, by 2007 there were nearly 1900. With the implementation of the PPACA  we have tipped the scales at nearly 2,262 mandates. Keep piling them on and costs will continue to rise.

5.) Premiums will continue to increase when the following additional PPACA imposed requirements begin on January 1, 2014

A.) The “minimum actuarial value” requirement that forces insurers to provide more financially generous coverage with fewer co-pays and deductibles.
B.) The “community rating” provision that forces young Americans to pay far more for health insurance in order to subsidize older Americans. This was included in the PPACA even though historical data points to the catastrophic failure of ‘community rating’.
C.) The “guaranteed issue” provision that forces insurers to take all comers, even if they are already sick.
D.) The “essential health benefits” mandate that forces insurers to cover health-care services that many customers wouldn’t otherwise want to pay for.

The sad truth is, even though the President promised ‘affordable health insurance for all Americans‘, many Americans will not receive health insurance at all. In fact, according to the Congressional Budget Office’s latest assessment,
30 million Americans will remain uninsured even after full implementation of the PPACA. Worse yet, 17 million more will simply be enrolled in a Government Welfare program called Medicaid. Many who do receive health insurance will receive a very large tax payer funded subsidy, which will continue to detach the consumer with the true cost of health insurance. To find out what health insurance will cost you in the PPACA ‘Health Insurance Exchanges’ click here.