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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We need to start raising significantly more in donations from our online community of readers, especially from those who read Mother Jones regularly but have never decided to pitch in because you figured others always will. We also need long-time and new donors, everyone, to keep showing up for us.

In "It's Not a Crisis. This Is the New Normal," we explain, as matter-of-factly as we can, what exactly our finances look like, how brutal it is to sustain quality journalism right now, what makes Mother Jones different than most of the news out there, and why support from readers is the only thing that keeps us going. Despite the challenges, we're optimistic we can increase the share of online readers who decide to donate—starting with hitting an ambitious $300,000 goal in just three weeks to make sure we can finish our fiscal year break-even in the coming months.

Please learn more about how Mother Jones works and our 47-year history of doing nonprofit journalism that you don't elsewhere—and help us do it with a donation if you can. We've already cut expenses and hitting our online goal is critical right now.

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