Here’s an Interesting Wrinkle in the Rate Shock Debate

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Here’s an email from a reader in California with an interesting wrinkle on the rate shock debate:

I’m self employed, with individual health insurance coverage, and my family is one of those whose current health insurance policy is being canceled and whose premium will rise once we purchase insurance on the CA exchange. But it’s not as simple as that. We signed up for our current policy in November 2011 (therefore no grandfathering) and the premium was substantially lower than the policy we had prior to that. In hindsight, I’m guessing that the premium for that newly introduced plan was so low because the insurance company knew it would have to be canceled in 2014. So, they weren’t going to incur a lot of losses or have to make provisions for a long claims tail.

The premium for our new insurance, purchased from the exchange, is going to be about what our original (pre-2011) policy premiums would have been now, allowing for the usual annual premium increases. So, yes, we’re having to move from cheaper to more expensive insurance. On the other hand, it’s very likely that the cheaper policy would never have been available in the first place without the ACA’s 2014 deadline for such plans. Of course, the insurance company didn’t clarify back in 2011 that this policy had a limited lifespan and would have to be replaced in 2014 with a new one.

I wonder if this is at all common?

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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