Insurance companies raise rates on consumers as ObamaCare comes to an end
Insurers have been raising rates for a decade as the Obama administration ramps up its efforts to help consumers avoid expensive medical bills and bankruptcies.
The latest round of premium hikes comes amid signs that President Trump’s healthcare law is in trouble.
Insurers and industry officials are raising rates in order to avoid the threat of a federal court ruling that would have stopped the implementation of the healthcare law.
The latest wave comes after the Centers for Medicare & Medicaid Services said it would allow consumers to keep their current coverage but impose a 1.5% surcharge on premiums.
The agency is already the biggest source of government subsidies for insurers to cover premiums for individuals.
The Trump administration is also raising rates on small businesses.
Insurers are facing increased competition from more profitable insurers as well as the emergence of companies that are more cost-effective at insuring consumers.
Insurance companies also are facing higher medical bills due to the healthcare overhaul.
The Trump Administration is trying to increase profits by cutting costs and lowering the quality of coverage.
And it is working to reduce costs by lowering deductibles and out-of-pocket costs.
The cost of medical care is rising rapidly as premiums have increased in recent years.
But the Congressional Budget Office said last month that the average annual increase in premiums in 2020 would be around 2.5%.
The Obama administration has sought to lower costs by increasing Medicaid reimbursements to insurers to help pay for healthcare.
The Medicaid program pays for prescription drugs, lab tests, and other medical services for low-income Americans.
But many states have decided to reduce Medicaid reimbursement to insurers.
According to the nonpartisan Congressional Budget Service, more than half of all Medicaid spending went to cover drug expenses in 2020, while the rest went to covering medical care.
The CBO also estimated that the ACA’s subsidies will pay for less than a quarter of that cost.
But the Congressional Progressive Caucus, which represents more than 70 House Republicans, wants to cut reimbursements and says they are driving up costs for consumers.
The GOP-controlled House is holding a hearing this week to discuss the ACA and the CBO report.