Insurers are looking to increase premiums to recover from financial losses
Insurance companies offering coverage through exchanges throughout the United States are looking to increase premiums in the coming year. This may not be a surprise, as industry experts and analysts have predicted significant growth in insurance premiums in the coming years. According to analysis from HealthPocket, however, rates are expected to grow by an average of 12% in 2016 for individual policies. Premiums enrolled in the most popular plans, such as Silver tier plans, could increase by as much as 14%.
HMO plans expected to see rates increase by as much as 20%
Those with HMO and EPO plans could see their rates increase by 20% and 18%, respectively. There are several factors affected the growth of insurance premiums, such as the increasing frequency in which consumers are using their health insurance coverage. Several insurers have reported spending more on medical claims than what they collect through premiums. In order to compensate for this loss, they have requested rate increases, but these must be approved by state and federal regulators before they can take effect.
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Higher premiums could place consumers under financial burden
Higher insurance premiums may come as a shock for some consumers. The majority of consumers currently receive financial aid from the federal government to cover the cost of their health insurance policies. These people are unable to afford insurance coverage on their own and could be placed under greater financial strain as a result of higher rates. Those that are not receiving subsidies may feel a greater shock, as they do not have financial aid for their coverage.
Affordable Care Act does not prevent insurers from raising rates
Increasing health insurance premiums have been one of the greatest points of contention concerning the Affordable Care Act. As the name of the federal law suggests, its aim was to make insurance coverage more affordable and accessible to consumers. The law managed to achieve this goal, to some degree, but insurance companies are feeling a greater need to recover from financial losses. The law does not forbid insurers from raising rates.