A study conducted by Morgan Stanley has found that healthcare insurance premiums are rising fast in the individual and small group market:
Health insurance premiums are showing the sharpest increases perhaps ever according to a survey of brokers who sell coverage in the individual and small group market. Morgan Stanley’s healthcare analysts conducted the proprietary survey of 148 brokers. The April survey shows the largest acceleration in small and individual group rates in any of the 12 prior quarterly periods when it has been conducted.
The average increases are in excess of 11% in the small group market and 12% in the individual market. Some state show increases 10 to 50 times that amount. The analysts conclude that the “increases are largely due to changes under the ACA.”
The analysts conducting the survey attribute the rate increases largely to a combination of four factors set in motion by Obamacare: Commercial underwriting restrictions, the age bands that don’t allow insurers to vary premiums between young and old beneficiaries based on the actual costs of providing the coverage, the new excise taxes being levied on insurance plans, and new benefit designs.
These increases are on top of those reported earlier in the year. It seems reasonable to suspect that large group premium prices will rise, too, if they ever stop being grandfathered in.
I think we should also consider the possibility that as premiums rise while fewer and fewer people are covered under self-insurance plans effectively giving breaks to the largest companies in the country will become increasingly difficult to justify politically.