Don’t Pay Attention to Obamacare Rate Increase Horror Stories


I wrote about this once before, but it’s worth repeating: don’t pay too much attention to scare stories about gigantic increases in Obamacare premiums next year. Insurers that request increases of more than 10 percent are required to get clearance from state and federal regulators, which means that the only increase requests that are public right now are the ones over 10 percent. Jordan Weissmann explains what this means:

“Trying to gauge the average premium hike from just the biggest increases is like measuring the average height of the public by looking at N.B.A. players,” Larry Levitt of the Kaiser Foundation told the Times. Moreover, some states may ultimately end up rejecting the gaudiest requests if they’re deemed unjustified.

How skewed is the federal database? Here’s one telling illustration from ACAsignups.net founder Charles Gaba. In Washington State, 17 insurers submitted health plans for next year, requesting an average rate increase of 5.4 percent. Only three of those companies asked for a big enough hike to show up on the federal rate review site. Together, they requested bumps averaging 18 percent, more than three times larger than the actual statewide mean. That gap should make everyone think twice before drawing conclusions from yesterday’s data dump.

This will be the first year in which insurance companies have a full year of experience with Obamacare to draw on. Does that mean it’s possible that rates will go up a lot, now that they know what they’re in for? Sure, it’s possible. But so far there’s really no evidence that the demographics of the Obamacare population are very different from what the companies expected. Nor are companies dropping out of Obamacare. In fact, in most states competition is increasing. All that suggests that Obamacare premiums will rise at a fairly normal rate next year. For the time being, then, don’t pay too much attention to the Fox News horror stories. We’ve heard them all before.

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

Share your feedback: We’re planning to launch a new version of the comments section. Help us test it.