The Revenge of the Insurance Industry

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The Wall Street Journal reports that health insurers are planning to dramatically raise premiums to pay for extra benefits required by the healthcare reform bill passed earlier this year. Is this legit? Or are insurers just using ACA as a handy excuse to jack up rates? My guess is that a couple of sentences in the Journal piece tell the story:

The rate increases largely apply to policies for individuals and small businesses and don’t include people covered by a big employer or Medicare.

….Democrats front-loaded the legislation with early provisions they hoped would boost public support. Those include letting children stay on their parents’ insurance policies until age 26, eliminating co-payments for preventive care and barring insurers from denying policies to children with pre-existing conditions, plus the elimination of the coverage caps. Weeks before the election, insurance companies began telling state regulators it is those very provisions that are forcing them to increase their rates.

Hmmm. Don’t those provisions apply to all plans, not just individual and small-business policies? So why are insurers boosting rates only on the latter? I’m sure Aetna and Blue Cross have some extremely complicated and plausible sounding reasons for this, but I’d take them with a grain of salt. More likely they’re raising rates for the same reason they’ve been raising rates for the past few years, and it has almost nothing to do with ACA. Caveat emptor.

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