2018 Rate Review for the individual non-group health insurance market

New for 2018, Marketplace rates for children will rise 20% to 53%, on top of the additional average 20%-30% rate increase insurers in Ohio demand in 2018.

Child rates in the past they have always been 63.5% of the adult base rate until the age of 21. Next year, 0-14 will be 76.5% of the adult base rate, with ages 15 to 20 being 83.3% to 97% of the adult base rate.

2018. We all know how it’s going. We are supposed to feel lucky that we can at least still buy health insurance, after what we witnessed in Congress this summer, and how it could have gone, but for one vote.

We were warned that rates would go through the roof this year. That’s due to the uncertainty of the government reimbursing insurers for CSRs, the uncertainty over the insurance requirement mandate, the uncertainty of a repeal, as well as the totally understandable (not), predictable, ever-rising, unsustainable, runaway medical and non-negotiable pharmaceutical cost factors, that alone amount to a 7% rate increase in 2018, along with the resumption of the ACA tax on premiums that was halted last year, and some increases in administration costs. We are braced for rates to going up 20 to 40% or more. Hands above our heads, they got us, we have to pay.

On top of all of that, CMS snuck in that child rate hike on December 16, 2016, just after Trump was elected. On top of all the “uncertainty” and the rising medical costs blah blah blah, they sure fixed us a good one.

A typical family may see a rate hike of 29% for themselves, and 71% for their children.

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Typical family, photographed here in 2000, has been through it all.

A Little Story About A Typical Family

Take your typical Ohio family – say, John and Pam, who are 55. They have two kids who are 17 and 20. John is an independent contractor and earns $78,000. Pam is an adjunct university professor and earns $21,000. Together they make $99,000 before taxes, just over the 400% Federal Poverty Level that would qualify them for a health insurance subsidy. Their net income after taxes is $78,000.

Having to buy individual insurance, they chose Molina, because that was the only plan in which they could find doctors who would accept them as patients.

Toledo, Ohio is a closed town when it comes to doctors accepting new patients. When it became too costly in 2016, John and Pam had to give up their Medical Mutual PPO insurance and hence their ProMedica doctors that they had been going to for 20 years. Molina was one of the cheapest insurance plans they could buy. But they had to find new doctors, because their long-time doctors didn’t accept Molina insurance.

MercyHealth doctors are in the Molina network, and they are not as closed as ProMedica doctors.  That’s why our typical family chose Molina over CareSource, another cheap plan, but one with a 90% inaccurate provider network, a network that supposedly included ProMedica doctors, but not really. (ProMedica, when last checked, had only one primary care family practice doctor accepting new patients, but you’d have to call back in a month to schedule an appointment, which supposedly would be scheduled for three months after that.*)

If John and Pam had made just two thousand dollars less (see Kaiser subsidy calculator here),  this typical family would have qualified for a $3,334 subsidy this year (undoubtably it would be more than $6,000 in 2018 because the SLCSP which is tied to the subsidy may be 20-30% more, in tandem with the rest of the plans; see rate increases below.) The subsidy would have reduced their health insurance premiums to 10% of their gross income for a silver plan, but alas, they make too much money to qualify.

John and Pam chose a gold plan with a lower deductible because they couldn’t afford the risk, just in case, of having to come up with $7,500+ to meet the deductible before the insurance would kick in.

With an increase of over $6,000 in 2018 for health insurance, their tightest budget, cutting down on food, recreation, transportation and clothing, exceeds their net income. Forget about helping with their kids’ education or even saving for their own retirement, which is coming in 10 short years – in 2018, they will be going into credit card debt on their necessary expenses just to be able pay for health insurance.

As it was, in 2016 John and Pam paid 22% of their net income on health insurance, $17,448, at $1,454/month (John and Pam’s rates were $554.50 each per month, and the kids’ rates were $172.62 each). It was considerably more than they were paying just a few years before. An affordable and reasonable percentage as written in  the ACA would be 13% of their take-home, or 10% of their gross. 22% of their take-home pay on health insurance made their budget very tight.

Next year, John and Pam’s health insurance will go up 39%. Health insurance will surpass housing as biggest chunk of their budget, becoming a whopping 31% of their take-home income, $24,240 for the year; $2,040/month. The astronomical but necessary expense for health insurance squeezes out any money that could ever have been saved for retirement, which they need to fund, and eliminates any possible budget they may have hoped for to help their kids with higher education expenses.

While John and Pam’s health insurance is going up 29%, health insurance for their kids goes up 71%. The family’s health insurance premiums next year will cost $6,792 more than last year!

Time to stop the killing.

Too bad for the 30% of the individual market, like John and Pam, who don’t get a subsidy; their health insurance expense is simply unsustainable. They may have to keep working into their seventies, because there’s no way they can save money for retirement when the insurer gets every red cent. And their kids can forget about college.

OTHER OBSERVATIONS

Since all five insurers’ prices are going up about the same, people who receive a subsidy might find that it doesn’t affect them much because the second lowest cost silver plan on which their tax credit is based will rise similarly. Hence, the government and taxpayers will pay the increase. Ironically, the government that caused the uncertainty that led to the increases will be funding the increases via the subsidies. Directly feeding the hungry, greedy insurance corporations. If only the government would take that money that they throw to greedy demanding insurance companies and allocate it to a single-payer system in the U.S., it would go a long way to stimulate our economy. Everyone could be covered at much less cost per person. Medicare is a single-payer system we could use that is already in place.

For 2018 in Ohio, Medical Mutual PPO, United Healthcare, Anthem and Aetna wil be gone, along with HealthSpan and InHealth, the failed co-op.

Anthem is actually continuing in one tiny rural county in southern Ohio, with just a few people, so that it can stay in the game, if you call those fair rules, just in case in the next five years it wants to jump back in. Aren’t they clever at the expense of the public good. But since healthcare is not considered a public good, the entire healthcare industry can make profit over people all day long and into the next decade, until we are all squeezed dry.

“You will take the rate hike and be happy, you weak, helpless, but ever so lucky little suckers!” says the American healthcare system to the American public.

It is a miserable, rotten, broken, healthcare system, that our leaders have made even worse. We will eventually have single-payer, so can we get on with it? Single-payer has proved to work well in the rest of the civilized world.

See also, June 11, 2017 Rate Review Observations