Rate hikes for coverage in the US may be less serious than previously thought
Consumers throughout the U.S. have been experiencing rate hikes for their health insurance coverage over the past few years. Rates have been growing at a rapid pace, placing many people under significant financial pressure. The Affordable Care Act is meant to resolve this issue by helping slow down the frequency at which insurance premiums increase, and the health care law may actually be succeeding in this endeavor. Early rate filings coming from many large insurance companies suggest that rates will be raising significantly slower than they had in the past.
Rates expected to increase by an average of 10% in 2015, based on initial filings
The final rate filings from insurance companies in the U.S. are not likely to be released for the next few months. These rates will take effect in 2015 and many have suggested that premiums would be significantly higher for coverage next year due to the provisions of the Affordable Care Act. Early filings show, however, that rates are expected to rise by an average of 10%. Over the past few years, rates have typically been risen by insurance companies by as much as an average of 30%.
Insurers must raise rates in order to manage costs of health care reform
Insurers note that they must increase rates for coverage because of the provisions of the health care reform law, but that rate increases may not be as costly as had previously been expected. Insurers are being required to provide coverage to a larger number of people and can no longer deny coverage to those that have pre-existing medical conditions. Higher rates will help insurers overcome some of the financial challenges they will face due to the health care reform law, but the insurance industry, as a whole, is not likely to see any significant losses due to the law itself.
Competition is helping keep insurance rates stable
Competition is also playing a major role in keeping insurance rates relatively stable. A recent report from the Urban Institute showed that insurers are having to compete with one another more aggressively because of the introduction of insurance exchanges. These exchanges are meant to provide consumers with access to affordable policies that are offered by private insurance companies.