Health Insurers Say Premiums Under Obamacare Will Be Much Higher In Some Places Next Year


When Sec. Kathleen Sebelius testified before Congress last week, she admitted that health premiums would continue to rise under Obamacare, but claimed they would not rise as fast as they were rising prior to the passage of the law. "I think premiums are likely to go up," said the Health and Human Services chief, "but go up at a smaller pace than what we've seen since 2010." 

But health insurance industry sources tell The Hill that big premium hikes are on the way in some areas

Health industry officials say ObamaCare-related premiums will double in some parts of the country, countering claims recently made by the administration.

The expected rate hikes will be announced in the coming months amid an intense election year, when control of the Senate is up for grabs. The sticker shock would likely bolster the GOP's prospects in November and hamper ObamaCare insurance enrollment efforts in 2015.

There's going to be a lot of variation. Some states and regions will see very large hikes. Others will see minimal change.

Part of that is because of the way insurance markets are split up by state, which means that states with underperforming exchanges or bad enrollment demographics will likely fare differently than those with more robust, healthier enrollment. Another part of it is pricing strategy for the launch years. 

Some insurers initially underpriced their policies to begin with, expecting to raise rates in the second year. 

Others, especially in larger states, will continue to hold rates low in order to remain competitive.

It's also a result of changes the administration has made to Obamacare, which have been designed to help the law politically, but were always likely to cause policy problems later on. 

Insurance officials are quick to emphasize that any spikes would be a consequence of delays and changes in ObamaCare's rollout. 

They point out that the administration, after a massive public outcry, eased their policies to allow people to keep their old health plans. That kept some healthy people in place, instead of making them jump into the new exchanges.

Federal health officials have also limited the amount of money the government can spend to help insurers cover the cost of new, sick patients. 

If the Obama administration's political fixes end up leaving people with dramatically higher premiums, you can probably expect more political problems down the road.