On July 29, in a letter to Health and Human Services Secretary Kathleen Sebelius, Insurance Commissioner Ralph Hudgens requested an emergency extension to the deadline for approving rates in the upcoming insurance exchange to be implemented in Georgia.
Although Georgia is one of 27 states that chose not to set up its own state exchange, Hudgens still is required to approve premium rates for health-care policies that will be offered in the federal-insurance exchange in Georgia this fall.
The deadline for approving the rates was July 31 and, because he received no reply from Sebelius, Hudgens was forced to approve the premiums submitted by health insurers.
Hudgens had requested the extension because insurance companies in Georgia had filed rate plans increasing health-insurance rates anywhere from 40 to 198 percent.
In his request for an emergency extension, Hudgens maintained that Georgia consumers could not afford these types of massive rate increases. He also wanted HHS to help determine why these massive requested rate increases proposed by the insurance companies were justified.
The bad news for Georgia compounded July 31 when two of the original seven insurance companies that had filed proposals, Columbus-based Aetna and Coventry, said they were pulling out of the exchange.
Even more concerning now is that two of the five remaining insurers have expressed concern that they would be hit with more new members than they could handle, according to Hudgens.
This is one of the primary dangers of the exchange. In order for any competitive exchange or marketplace to function properly, there must be competition. The more insurance providers participating, the more bids received, the lower the rates should be.
Supporters of the exchange readily point out that the rates don’t reflect the subsidies that will be provided by the federal government to many people so that they can afford coverage. This, too, is a smoke-and-mirrors approach.
The fewer insurance providers participating in the exchange leads to higher prices, which leads to more subsidies being required in order to make the exchanges affordable. More subsidies, of course, means that more federal dollars will be required to keep the exchanges working, which translates into higher taxes and higher penalties for those who don’t have insurance.
Another danger is the pool of participants within the exchange. In order to function properly, there must be a proper mix of sicker and healthy individuals. A disproportionate share of sicker individuals will result in the costs of the exchange being non-sustainable.
This is where young people come into the picture.
Obviously, in the vast majority of situations, young people are healthier and, therefore, need less coverage. However, this is the age group where rates are going up the most.
It certainly is not a stretch to say that Obamacare is the most onerous tax to ever be imposed on any age group. Not only are young people now being required to have health insurance or be penalized by the Internal Revenue Service, but they now are being forced to pay higher rates in order to average out the costs of sicker individuals.
Last week’s developments lead many of us to believe that Obamacare truly is a train wreck waiting to happen.
Fortunately, the U.S. House of Representatives, for the 40th time, last week passed a bill that would eliminate Obamacare. Unfortunately, it probably will never see the light of day in the Senate.
It’s been said that government failures usually result in more government solutions to fix the problems created.
The only solution to this train wreck is repeal.
Carter can be reached at 421-B State Capitol, Atlanta, GA 30334 and 404-656-5109.