Health insurance rate proposals throughout US show troubling trend

Maryland Health insurance

Maryland Health InsuranceMaryland makes public health insurance rate proposals from insurers

Last month, Maryland became one of the first states in the U.S. to make public the rate increases health insurance companies are planning to institute next year through the Affordable Care Act. State officials have noted that health insurance companies are planning to raise rates on coverage by an average of 25% throughout the state. This has caused some discomfort with Maryland residents that are not eager to pay more for the coverage they are receiving, and this sentiment may be shared with other consumers throughout the country.

Rates increase proposals are coming in throughout the US

Maryland is just one state among many where health insurance prices are expected to spike next year. During the spring, insurers throughout the country began submitting rate increase proposals for next year. A somewhat troubling pattern has emerged involving these rate increase proposals: All of them were significant increases over their 2012 and 2013 levels, with most seeking a 25% increase or more. In the case of Maryland, insurers suggest higher prices are necessary due to the morbidity of the state’s insured population and the costs associated with this population due to provisions of the Affordable Care Act.

Federal law forces insurers to cover the sick

The provision in question requires all health insurance companies to offer coverage to those with pre-existing medical conditions. In the past, insurers could refuse to provide coverage to these people, and often did so due to the financial risks they represent. Now, however, insurers are unable to refuse coverage due to federal law. Health insurance companies argue that this will lead to a significant increase in their losses due to the costly nature of certain medical conditions and the fact that healthy consumers have little to no incentive to purchase and maintain their own health insurance coverage.

Law offers some protection that insurers may be able to circumvent

While the law requires insurers to offer coverage to the ill and those with pre-existing medical conditions, insurers are barred from charging these consumers higher rates for their coverage. The law does not stop insurers from raising rates universally, however, and many companies intend to do so in order to account for the larger financial losses they are expecting to be exposed to in 2014.