Federal Health-Care Overhaul to Raise Rates on Individuals and Small Business


Friday September 10th, 2010   •   Posted by David Theroux at 1:24am PDT   •  

In an article by Janet Adamy, the Wall Street Journal reports that contrary to the claims of the Obama administration, rates for health insurance for individuals and small businesses are projected to increase by as much as 20%. Although such rate increases primarily apply to new policies, “consumers could be subject to the higher rates if they modify their existing plans and cause them to lose grandfathered status.”

This means that while the efforts of the health overall’s backers were to front-load the law with provisions that would win public support by producing lower rates, the exact opposite is happening.

As the article notes:

“Health insurers say they plan to raise premiums for some Americans as a direct result of the health overhaul in coming weeks, complicating Democrats’ efforts to trumpet their signature achievement before the midterm elections.

“Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked for premium increases of between 1% and 9% to pay for extra benefits required under the law, according to filings with state regulators.

“These and other insurers say Congress’s landmark refashioning of U.S. health coverage, which passed in March after a brutal fight, is causing them to pass on more costs to consumers than Democrats predicted.

“The rate increases largely apply to policies for individuals and small businesses and don’t include people covered by a big employer or Medicare.

“About 9% of Americans buy coverage through the individual market, according to the Census Bureau, and roughly one-fifth of people who get coverage through their employer work at companies with 50 or fewer employees, according to the Kaiser Family Foundation. People in both groups are likely to feel the effects of the proposed increases, even as they see new benefits under the law, such as the elimination of lifetime and certain annual coverage caps.

. . . .

“Previously the administration had calculated that the batch of changes taking effect this fall would raise premiums no more than 1% to 2%, on average.”




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