What Obamacare Means for Your Health Care

Laura Shin

Health Care CostsGood news!

After years of astronomically rising prices, health care costs are increasing at their slowest rate in decades; recent health spending has been so much lower than projections, it’s saving Medicare and Medicaid hundreds of billions of dollars in projected spending.

Even better, some of those savings are trickling down to patients. In 2010, three out of four of insurers requested that monthly charges to policyholders be raised 10% or more. Last year? Only one-third of insurers requested premium increases that big, saving consumers $1 billion.

Which leads us to some interesting questions: If insurance costs are slowing down overall, then why are any insurers still requesting double-digit rate increases that will cost consumers more? And, hey, wasn’t the Affordable Care Act supposed to rein in how much we pay for our health insurance?


Why Are Health Care Costs on the Decline?

In 2013 so far, the average increase in the cost of health insurance has been low, almost in line with inflation, compared to insurance hikes that were double-digits above inflation previously.

One big factor is the recession, which began slowing down the increase in health costs even before Obamacare passed. Since people have less disposable income, some of them are forgoing medical care.

Additionally, some insurers have shifted away from the “fee for service” method, which pays doctors for every procedure they perform or test they run. Instead, they’re testing out pay structures that give doctors incentive to reduce complications and stop wasteful treatments.

RELATED: Hate That Your Doctor Is Rushed? Blame the Payment System

Some Obamacare provisions already in effect require regulators to approve any request to increase a health insurance rate by 10% or more. Karen Pollitz, a senior fellow at the Kaiser Family Foundation, says that provision has contributed to fewer requests so far, as more regulators are emboldened to tell an insurer when a rate increase isn’t reasonable.

In this landscape, then, why do some insurers still insist on huge rate hikes? For some policy holders in California, Aetna rates may go up by as much as 22%, Anthem Blue Cross rates by 26% and Blue Shield of California rates by 20%, reports The New York Times. In states such as Florida and Ohio, rates have gone up by 20% for some policy holders, which can tally up to several hundred dollars a month.

RELATED: Self-Insurance Is on the Rise

Where are these outliers coming from, when most other insurers can make do with just small increases?

  • monalisset

    If the Republicans are right, boy have they utterly failed in communicating their message. They sound dillusional, out of touch, and bordering insanity. If they can’t communicate like adults, they don’t deserve to be serving in public office and should be FIRED!

    • Don’tbeahater

      You are obviously a delusional liberal that should get some education.

  • Martha Yost

    This article is confusing and inconclusive. The title is clearly just a hook. What is it that you want to say? Are the Republican’s right or aren’t they? Sounds like “not” if indeed healthcare premiums are to be tempered and the “minimum medical loss” 80/20 ratio is in effect giving consumers more transparency. And why should consumers pay for investment errors in major health corporations? Is that in the Republican version of health care or the democratic version of healthcare.

    Perhaps most of your confusion could be settled by formatting more clearly, but this is enough to make me not want to read more articles from LearnVest.

    Also, I do wish Editors in Chief would have higher standards — journalists who want to be respected would stop using the term Obamacare. There is no such thing as Obamacare. It is a slang term that is used to slam our first effort at affordable health care for all. An article that wants to educate us toward’s being more financially aware should use correct terms – Affordable Care Act.

    Standards, my friends… standards. Raise them.

    • JV

      I work in healthcare consulting and it was initially ‘perceived’ that the term “Obamacare” was a conotation derived by the Republican party.

      However, from my experience, the term was used simply and frequently in healthcare organizations to describe the impending legislation, aka the ACA.

      Simply speaking “the ACA” takes longer to say, and is much less recognizable than “Obamacare”. For us, “Obamacare” became an inevitable and non-partisan term of reference for the ACA. Unfortunately Congress is so convoluted that it’s tough to see what’s actually goihg on.

      Btw, It’s actually the PPACA. Patient Protection and Affordable Care Act.

      In all, I completely disagree with the way this article presented “facts”. I think LearnVest has learned it’s lesson.

  • PoliticalOverload!

    I think this article would be much more interesting/ informative if politics were just left out of it. Why the attempt to determine which political party is right or wrong about a highly complex issue in less than 1,000 words? There is certainly no lack of political spin, partisan finger-pointing or “told ya so” these days. What there IS a lack of is dissemination of facts and thoughtful analysis. That’s what I come to Learnvest for and, unfortunately, I think you missed the mark on this one.

    • Maggie Hernandez

      I agree! I don’t care who is gloating and who is sulking, what I care about is whether or not the ACA is working. For me so far, it is.

    • http://www.facebook.com/rob.drury.12 Rob Drury

      That’s funny; I didn’t really see any political references in the article, except for the use of the term “Obamacare,” which is a moniker agreed upon by both sides of the political spectrum.

      Of course, provisions of the ACA are, at best, ineffective; at worst, incredibly detrimental to most consumers. The market is its own best regulator; manipulating it for political gain, the sole purpose of Obamacare, is always bad. That’s economics, not politics.

  • Maggie Hernandez

    Politics aside, people with pre-existing conditions, including pregnancy, can get health insurance. As someone with a genetic pre-existing condition that has led to insurance denials in the past, I greatly appreciate what the ACA has done. It is still horribly expensive for me to get health coverage, but at least now I can and next year the practice of “rate-ups” will be changing. We can’t always control our health. Exercise and diet prevent many illnesses, but the ones in your DNA are uncontrollable.

  • jeppe

    My portion of my insurance premium at work rose 40% this year. I’m not sure where the writer got their information, but it seems highly unlikely that insurers have to cover kids to age 26, have no limits on amount, add a host of other coverage and have their rates got down. In addition, besides the governments spending our great grandchildren’s money, they are now requiring the younger generations to subsidize the older population’s health insurance. Automobile rates change based on age (experience) and other factors. the idea that health insurance should be different is totally against the free market.