Obamacare "Death Spiral": Maryland Insurer Seeks 50% Premium Increase For 2018

Tyler Durden's picture

For the past several months we've observed in complete amazement as Democrats have repeatedly hailed the 'great accomplishments' of Obamacare while the system was literally, and quite tangibly, collapsing in epic fashion all around them.

The latest evidence of Obamacare's "death spiral" comes from the state of Maryland where insurers have  just submitted their rate increase requests to Insurance Commissioner Al Redmer.  Unfortunately for Maryland residents the numbers are fairly staggering, in a bad way, with the largest insurer in the Mid-Atlantic region, CareFirst Blue Cross Blue Shield, requesting a 50% YoY premium increase.

The new rates would mean that a 40-year-old nonsmoker in the Baltimore area would face premiums ranging from $359 a month to $715 for a benchmark plan, before receiving any federal subsidies.  CareFirst said the rate increases are necessary because the company has lost $600 million serving ObamaCare exchanges since the company first started selling plans in the marketplace 4 years ago.  Per the Washington Post:

“What we’re seeing is greater sickness levels. The pool of beneficiaries is becoming sicker, in part because healthier people are not coming in at the same level we hoped,” said Chet Burrell, chief executive of CareFirst, which insures about 215,000 people through the marketplaces set up by the Affordable Care Act in all three states.

 

Burrell said he was worried that the market was in the early stages of a death spiral, in which sick people who need insurance stay in the pool but healthier people drop out, causing insurers to raise rates — driving even more healthy people out of the market.

 

“We were hoping for more stability. The factors that I have described to you today lead to instability and to a spiral, and we think we are in the beginning of that,” Burrell said.

The rate filings are a starting point for negotiations, but Burrell noted that the numbers could rise. He said his company had made its filings assuming that the cost-sharing reductions, billions of dollars in federal payments that lower out-of-pocket expenses for about 7 million Americans, would be made. Politicians have not committed to making those payments in 2018, and if those go away, premiums could rise another 10 to 15 percent, Burrell said.

Meanwhile, the proposed 2018 rate hike of 50% comes on top of a 25% hike in 2017 meaning that Maryland residents will be paying 87.5% more for individual health insurance plans in 2018 than they were in 2016. 

Obamacare

 

Of course, Maryland's Insurance Commissioner noted that these initial rate requests are just a starting point for negotiations and held out hope that all would be well in the end. 

The Maryland Insurance Commissioner released rate requests from three other insurers, which ranged from 18 to 37 percent increases. A 40-year-old nonsmoker in the Baltimore area would face premiums ranging from $359 a month to $715 for a benchmark plan, before receiving any federal subsidies.

 

“It’s important to remember that these rates are what companies have requested, and not necessarily what will be approved,” Insurance Commissioner Al Redmer, Jr. said in a statement. “There will be a thorough review of all the filings. As in years past, we may require changes.”

Of course, all of this should come as little surprise to our readers as we've been writing for years that the entire Obamacare system was on the "verge of collapse" as premiums were soaring, risk pools were deteriorating and insurers were pulling out of exchanges all around the country leaving many Americans with just a single 'option' for health insurance (see "Obamacare On "Verge Of Collapse" As Premiums Set To Soar Again In 2017").  In fact, the following charts provide a stunning illustration of that collapse (charts per Bloomberg):

Ocare

 

But sure, Obamacare is a great system and Republicans are trying to 'ruin' healthcare in America.

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Seasmoke's picture

Better start stealing all Fannie and Freddie's money ASAP !!!

Beam Me Up Scotty's picture

There is no financial incentive to be healthy under the current system.  Only hoards of people living with their hands out.  Thats the problem.  Too many horses sitting in the wagon, not enough horses pulling the wagon.  When the horses pulling start climbing into the wagon, why pull, when you can sit, the wagon will stop.

Harry Paranockus's picture

THey could have solved that lack of incentive by mandating that the "free" annual checkup" provided by Obamcare had to take place or you lost your subsidy. And they should have required that a surcharge would be required of people who failed to correct their unhealthy lifestyles.

nmewn's picture

Better yet, how about some re-education camps "to get their minds right"!

Fucking commies & fascists everywhere I turn these days.

shamus001's picture

GREATEST TRANSFER OF WEALTH-.... from the healthy to the sickly.  Clearly not enough healthy people CAME TO PAY FOR THE UNHEALTHY SINS OF THE SICKLY!

Thats why you treat your kids well!  Because just as THEY were YOUR responsibility, YOU ARE THEIRS! The *sshole down the street doesn't want to foot the bill for your Dad! (And neither does this *sshole)

Dr.Bullish's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

mary mary's picture

The best financial incentive to be healthy would be to end Medicare, Medicaid, and Obamacare.  I'm on Medicare, but I'm willing. 

It is disappointing that doctors, pharmaceuticals, and hospital companies don't believe in Free Markets.

Duc888's picture

Isn't that amazing that MSM is NOT reporting on that FRAUD that is OBOMBaCare.

Paul Kersey's picture

Could this possibly have something to do with the price of health care going up?

"According to the Mayo Clinic and Olmsted Medical Center, 70 percent of Americans take at least one prescription drug, and more than half of these people take two. The most commonly prescribed are antidepressants, antibiotics and painkillers.
Over the last 10 years, prescription drug use in the United States has steadily increased. According to researchers, this trend is not expected to slow down anytime soon as drug companies continue to hammer out new and “exciting” treatments for any number of conditions. The increase in use raises concerns over many things including prescription practices, drug expenditures and the impact that taking so many drugs has on long-term physical and mental health.

One area of great concern involves the number of side-effects that so many drugs have. If you’re taking prescription medications, then you may want to listen up. The Archives of Internal Medicine recently published a report stating that the average prescription drug contains 70 side-effects, with some posing as many as 525 possible reactions. Yet manufacturers are attempting to keep users’ worries at bay by claiming these medications are safe and the reactions only need to be listed in an effort to avoid possible lawsuits.

If these medications, which can contain an upwards of hundreds of potential reactions, are so safe, how is it that each year 700,000 people visit the emergency room due to medication side-effects? While it’s true that some of these reactions may not be life-threatening, they are serious for the 100,000-plus individuals who lose their lives to them each year, making prescription medication reactions the fourth leading cause of death in the country."

nmewn's picture

Well I just gotta say, its a damned good thing the FDA can't be sued for malpractice! Why, they might have to lay people off or (perish the thought!) close their doors because of their graft & corruption in colluding with Big Pharma!

"We're from the government and we're here to help." ;-)

weburke's picture

people are EATING food that causes body problems. and providing that harm is a deliberate and totally wide ranging effort of the elites. but, it is hopeless, because the tongue rules, and even YOU wont change. 

booboo's picture

Republicans should have waited another year until it all melted down.

Beam Me Up Scotty's picture

It might have been better if Hillary and the democrats had won.  Then there would be no question who created the smoking crater.

Paul Kersey's picture

Perhaps this has something to do with rising health care costs:

"According to the Mayo Clinic and Olmsted Medical Center, 70 percent of Americans take at least one prescription drug, and more than half of these people take two. The most commonly prescribed are antidepressants, antibiotics and painkillers.
Over the last 10 years, prescription drug use in the United States has steadily increased. According to researchers, this trend is not expected to slow down anytime soon as drug companies continue to hammer out new and “exciting” treatments for any number of conditions. The increase in use raises concerns over many things including prescription practices, drug expenditures and the impact that taking so many drugs has on long-term physical and mental health.

One area of great concern involves the number of side-effects that so many drugs have. If you’re taking prescription medications, then you may want to listen up. The Archives of Internal Medicine recently published a report stating that the average prescription drug contains 70 side-effects, with some posing as many as 525 possible reactions. Yet manufacturers are attempting to keep users’ worries at bay by claiming these medications are safe and the reactions only need to be listed in an effort to avoid possible lawsuits.

If these medications, which can contain an upwards of hundreds of potential reactions, are so safe, how is it that each year 700,000 people visit the emergency room due to medication side-effects? While it’s true that some of these reactions may not be life-threatening, they are serious for the 100,000-plus individuals who lose their lives to them each year, making prescription medication reactions the fourth leading cause of death in the country."

shamus001's picture

No one in my household uses ANY prescription drugs.  No one in my Mothers household uses either. (5 in that household) My Mom is 70 and says she would rather live with her aches and pains than use drugs!  Happy to say, her stubborn attitude is alive and well in me!

overmedicatedundersexed's picture

Paully , when you get pneumonia..just refuse the antibiotics..you show em..

FoggyWorld's picture

We may still get that opportunity to see it all melt down because people on both sides of the aisle in the Senate don't seem interested in Ryan-Care.  

_triplesix_'s picture

But muh voters are too stoopid...would still blame Trumpf, I'm afraid

Duc888's picture

http://www.atr.org/list-obamacare-taxes-repealed

The American Health Care Act (HR 1628) passed by the House today reduces taxes on the American people by over $1 trillion. The bill abolishes the following taxes imposed by Obama and the Democrat party in 2010 as part of Obamacare:

-Abolishes the Obamacare Individual Mandate Tax which hits 8 million Americans each year.

-Abolishes the Obamacare Employer Mandate Tax. Together with repeal of the Individual Mandate Tax repeal this is a $270 billion tax cut.

-Abolishes Obamacare’s Medicine Cabinet Tax which hits 20 million Americans with Health Savings Accounts and 30 million Americans with Flexible Spending Accounts. This is a $6 billion tax cut.

-Abolishes Obamacare’s Flexible Spending Account tax on 30 million Americans. This is a $20 billion tax cut.

-Abolishes Obamacare’s Chronic Care Tax on 10 million Americans with high out of pocket medical expenses. This is a $126 billion tax cut.

-Abolishes Obamacare’s HSA withdrawal tax. This is a $100 million tax cut.

-Abolishes Obamacare’s 10% excise tax on small businesses with indoor tanning services. This is a $600 million tax cut.

-Abolishes the Obamacare health insurance tax. This is a $145 billion tax cut.

-Abolishes the Obamacare 3.8% surtax on investment income. This is a $172 billion tax cut.

-Abolishes the Obamacare medical device tax. This is a $20 billion tax cut.

-Abolishes the Obamacare tax on prescription medicine. This is a $28 billion tax cut.

-Abolishes the Obamacare tax on retiree prescription drug coverage. This is a $2 billion tax cut.

As a presidential candidate in 2008, Barack Obama had promised repeatedly that he would not raise any tax on any American earning less than $250,000 per year. He broke the promise when he signed Obamacare. With the passage of the House GOP bill, tens of millions of middle income Americans will get tax relief from Obamacare's long list of tax hikes.

slwsnowman40's picture

How do we get them to abolish all the other taxes I pay?

mary mary's picture

You have to use the Point of View Gun.

JohnG's picture

Refuse to pay them, en masse.

I'd like to see them prosecute and jail 40 million tax revolting citizens.

If people would just realize that they do have the power to force change.......

Sadly, it is either ignorance or apathy.

I don't know and I don't care.....

drendebe10's picture

Fukda illegal Indonesian kenyan alien muslim fudgepacker imbecile and its bullshit obamycare. The turd needs its skin sand papered off, buried in salt then thrown out of town. Fuk the bastard fake president.

Kaiser Sousa's picture

but dont they know the "swamp drainer" is on the case?????

hilarious...
meet the new puppet....same as the old puppets (watch yo'mouth)...
but im talking about "Chump" (and we can dig it)...

Winston Churchill's picture

Novel approach, drain the swamp by adding water.

Theta_Burn's picture

.Gov...even with the insurance industry "fix" being in they still took a fucked up system and made it worse.

This shit can't implode fast enough for those of us that pay twice as much now, and with a mandated 6K deductable..

Duc888's picture

 

 

"The new rates would mean that a 40-year-old nonsmoker in the Baltimore area would face premiums ranging from $359 a month to $715"

That's a pretty sweeeeet tax hike!

SmilinJoeFizzion's picture

Any 40 year old living in Baltimore should move to Chicago immediately for quality of life improvements

Fish Gone Bad's picture

If one moves to Baker, CA then they can watch life pass them by and pine for the good old days of living in Baltimore. 

monoloco's picture

That's nothing the estimated premium for a 63 year old is $24k a year. 

TheAntiProgressive's picture

This is what happens when the government gets involved.  Make sure and vote Democrat because as you can see, they always have the better ideas.

rejected's picture

Oh Yeah,,, I'm sure Flipper-Care will be so much better as it's Republican.

Miss Informed's picture

It's sure to win them lots of new friends. Compassionate conservativeism and all that. "A kinder, gentler machine gun hand".

Silver Savior's picture

Yeah Republicans think everyone is rich and can make gold out of turds. Baaaaaaad.

adr's picture

It isn't that the pool of insured is getting sicker,  it's that millions of people were essentially getting paid to buy health insurance with Obamacare subsidies. 

The minimum wage worker pays almost nothing for the same insurance I have to pay $1800 a month for. So they go to the doctor for everything. Where they used to go to the ER, now they clog up every medical office. When the garbage class comes in the door, the medical centers see huge dollar signs and charge anything they can to the insurance company. Since the person is on subsidized insurance, the insurance company can't extract more cash from them. All they can do is pass the cost on to others in the form of higher premiums. 

The medical centers and doctors are first at fault, then the insurance companies. Actually the Jew that most likely sits as the head of the board at the hospital. The directors of the Cleveland Clinic read like a roll call at temple on a Saturday night. 

The top and bottom make out like bandits and the middle takes it up the ass. Just like the welfare mom with three kids who has ten times the disposable income of the average middle class worker. 

 

Silver Savior's picture

Then wouldn't it make more sense to just work for minimum wage?

swmnguy's picture

Yes, it would be much better to be completely shit-ass broke and utterly uck-fayed, with no hope for things ever getting better in the future.  Because then you'd qualify for government assistance money that you never see because it goes straight to your creditors, like your landlord etc.  But you wouldn't pay any income tax, so that must be nirvana!

That's why all the .01%'ers are dropping out and giving away all their money, because it's so great being on Welfare, sucking up all that government gravy.  Same reason Fortune 500 companies, top law firms and Wall Street outfits can't fill open positions.  All the Executives, lawyers and stockbrokers are going into Elementary School teaching jobs because they're so cushy and lucrative.

People feeling sorry for themselves is never attractive.  Especially when the self-pity makes them say utterly absurd things.

Harry Paranockus's picture

I'm confused. What the fuck difference does it make if rates increase 2% or 50%? The federal government picks up the tab though subsidies and the people on Obamacare continue on their merry way getting 87% of their premium covered by the tax payers.

BlackSun59's picture

You forgot the killer multi-thousand-dollar deductibles.

Harry Paranockus's picture

70%  of people on Obamacare buy Silver plans. Deductibles aren't that high. And the poorest among them get cost-sharing reductions to cover some of their deductibles and co-pays.

Ex-Oligarch's picture

 “It’s important to remember that these rates are what companies have requested, and not necessarily what will be approved,” Insurance Commissioner Al Redmer, Jr. said in a statement. “There will be a thorough review of all the filings. As in years past, we may require changes.”

Yo, Al, it's important to remember that if you don't approve higher rates for an insurer that's losing hundreds of millions of dollars every year, the insurer will leave your market.  

"... because healthier people are not coming in at the same level we hoped,” said Chet Burrell"

Yo, Chet, you can hope all you want, but healthy people aren't going to buy a "product" they don't need (because it's full of useless coverages), probably won't use (because they're healthy), can't use as a practical matter (because the deductibles are too high), and for which there is a less expensive alternative (pay the tax, enroll after you get sick). 

Anopheles's picture

That was also my though, that if the insurer doesn't everything they want, they will just leave.

Of course the politicians can't say that.  They have to spin the bullshit and then cave in the end, to APPEAR they have been "fighting" . While those who know what's going on realize it's all for show.

Akzed's picture

Hope is a poor strategy.

monoloco's picture

Yes, and I'm sure that they won't be inflenced at all by insurance industry lobbyists.

Silver Savior's picture

If you are half way healthy why bother with it all. Use the money to build a fund instead.

monoloco's picture

Yeah because "half way healthy" people never come down with serious or chronic diseases.