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

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. 



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):



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