What would you give up to afford your health insurance? Tens of thousands of Minnesotans may be forced to ask themselves this question in the coming months. The cost of buying health insurance has been steadily rising, and 2016 will be the worst year yet.
As a News Tribune editorial pointed out last week (Our View: “Is open enrollment getting less scary?” Oct. 29) and as most Minnesotans on the individual market just learned, monthly premiums are going up, forcing many families to make painful financial choices.
How much higher? Rates for all individual plans on the state exchange will grow by double digits — a far cry from President Barack Obama’s promise that families would save $2,500 a year on annual premiums. Thanks to the federal Affordable Care Act’s 11,000 pages of regulations and government mandates, rate hikes of 10 percent or more have become the new normal. All Minnesotans with individual exchange health insurance plans will feel this impact.
Minnesota’s largest insurer, covering about 179,000 people on the exchange, is hiking rates by nearly 50 percent on average. The average healthy individual in the Twin Cities region can expect premiums to rise to more than $200 per month — a 29 percent increase. Even the smallest average increases will be a still-high 15 percent.
One Minnesotan whose premiums are skyrocketing in 2016 observed his family is “going to end up spending more on health insurance than we do on our mortgage.”
And although many Minnesotans will receive federal subsidies, cushioning the full brunt of rate hikes, these subsidies only mask the underlying costs. It is simply undeniable that the Affordable Care Act is making health insurance more expensive every year.
The worst of the Affordable Care Act storm may be yet to come. At the end of next year, two of the law’s primary cost-concealing provisions — the so-called “risk corridors” and “reinsurance” payments — will expire. The first subsidizes insurers for the most costly patients. The second compensates insurers for higher-than-expected costs. Yet even with this extensive taxpayer-funded support, Minnesota insurers lost more than
$150 million in 2014, a sign of just how expensive health insurance is under the Affordable Care Act.
Things can’t get much worse. Or can they?
Dr. Stephen Parente, one of the nation’s leading health insurance experts and the associate dean at the Carlson School of Management at the University of Minnesota in Minneapolis, estimates premium hikes will continue in the coming years. His forecast anticipates 2017 individual plans will rise 11 percent, on average, with continuous increases for at least the next decade.
Countless Minnesotans may be forced to make difficult choices as this happens. Hundreds of dollars in higher annual insurance premiums could bring tradeoffs such as missing an electricity bill or rent payment.
Washington politicians have been trying to “fix” our broken health care system for decades by making the federal government more powerful and intrusive. It turns out their “fixes” have done nothing but make our problems worse. Instead of focusing solely on giving everyone health insurance — regardless of how expensive or poor its quality may be — both Republicans and Democrats should promote reforms that deliver consistently better and more affordable health care.
It’s clear we need bold reforms that address the heart of the problem. Federal bureaucrats are simply incapable of managing a health care system for millions of Americans.
What’s happened so far has only made health insurance more expensive, requiring too many painful choices — and shrinking options — from the people who pay for it.
Date: November 2, 2015