Health care premiums rise as new patients under Obamacare are sicker

Posted April 4
Updated April 7

New data from Blue Cross and Blue Shield Association suggests that people who have enrolled in health insurance since the Affordable Care Act are sicker and costlier. But costs won't stay up forever, government says. (Deseret Photo)

For some, the Affordable Care Act may not feel affordable at all.

Since the legislation was passed in 2010, many have seen their insurance premiums go up, and some cases by as much as 65 percent.

For a long time, insurers and government officials blamed rising premiums on the surge of previously uninsured people who now have access to health care. New data from Blue Cross and Blue Shield Association shows those newly insured people are also on average far sicker and costlier than people who were previously insured.

According to the New York Times, Blue Cross and Blue Shield Association compared people who enrolled in its services before and after the provisions of the ACA took effect in 2014.

They found that people who enrolled in 2014 and 2015 were significantly more likely to have serious illnesses and conditions than people who were already enrolled.

Diabetes and Hepatitis C were twice as common among newly enrolled individuals; other conditions like high blood pressure, depression and coronary artery disease were also more common. HIV was three times as common.

In terms of cost, new patients required much more medical attention than those previously insured. They visited doctors and other health professionals 26 percent more often and had 86 percent more hospitalizations.

The consequences of these increased costs, of course, is that insurance companies will hike up the insurance premiums for everyone — regardless of how much medical attention they actually require.

Blue Cross and Blue Shield has already obtained approval for premium increases for the coming year. Other national insurance providers, such as Kaiser, report that in 2016 premiums will go up significantly in some states while dropping in others.

It's impossible to say whether the "average" insurance premium is going up or down because rates vary drastically from one state to another. Where the cost of one plan in a certain state may go up, the cost of another may decrease.

But while many people may see their rates go up, the ACA is a boon to those suffering from chronic diseases. In the past, people with pre-existing conditions may have had limited coverage, been denied coverage altogether or paid exorbitant insurance premiums adjusted to their health conditions.

According to the Centers for Disease Control and Prevention, prior to the ACA people afflicted by HIV faced major hurdles in getting and retaining health care. Only 17 percent of people with HIV had private health insurance and 30 percent had no insurance at all.

Provisions of the ACA that took effect in 2014 made it impossible for insurance providers to deny coverage to people with HIV and other chronic illnesses or to impose yearly or lifetime coverage maximums.

This not only explains why so many HIV patients are now receiving care and driving up health costs, but it's also a reflection of the state of American health care prior to the ACA.

“It’s no surprise that people who newly gained access to coverage under the Affordable Care Act needed health care,” Department of Health and Human Services spokesman Ben Wakana told the New York Times. “That’s why they were locked out of coverage before."

Although insurance premiums may go up due to the present influx of new enrollees, government officials insist that the costs will stabilize within a few years.

MONEY recently reported, for example, that government spending on Obamacare for 2016 will exceed what the Congressional Budget Office predicted last year by $136 billion.

However, The New York Times points out that government spending is still less than what was initially estimated when the ACA became law in 2010. Even as more people than ever now have health insurance, costs to the government have dipped below early projections.

twitter: @zamturner


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