CHATTANOOGA, Tenn. (AP) - BlueCross BlueShield of Tennessee has proposed raising premiums next year by an average of more than 36 percent after losing $141 million during its first year of offering individual health plans through the federal Affordable Care Act. The state’s biggest health insurer said it initially underestimated the number and cost of the medical claims filed by new enrollees, the Times Free-Press reports. BlueCross Vice President Roy Vaughn said the insurer’s mission was to serve the entire state as affordably as possible under the Affordable Care Act. “It was a new market, and as we filed our initial rates for 2014 we had no data on the population that we would cover. We did not foresee the kind of medical costs that we’ve experienced with this group of members,” Vaughn said. The insurer enrolled nearly two-thirds of the 231,000 Tennesseans who signed up for health insurance exchange plans last year. Walter Davis, executive director of the Tennessee Health Care Campaign, urged state regulators to take a hard look at the proposed rate increases to make sure they are justified. “The number of Tennesseans who are uninsured is going down and more people are getting preventive care, rather than going to more expensive emergency rooms when they get sick,” he said. “That should help hold down costs and ultimately benefit everyone. But it may take some time since some of those getting coverage for the first time may be catching up for a lack of care in the past.” Kevin Walters, communications director for the Tennessee Department of Commerce and Insurance, said state regulators “will examine everything these health insurers give to us” before making a decision by the Aug. 25 deadline. “This is something we take very seriously for the consumers of Tennessee and we plan on scrutinizing each of these proposals,” he said. If the proposed rate hikes are approved, average individual rates would rise to more than 60 percent above their 2014 levels.
Medical insurance rate requests for many states were publicized in the media today. I saw more than a few annual increases of ~30%. <Sarcasm on.> Obamacare legislation has really come through with its projected savings as originally proposed. And more people have coverage. Thank you very much. <Sarcasm off.> Pfft.
Looks to me like basically what happened is this particular company undercut all the competition, succesfully claiming about 2/3rd of the new subscribers in the area. You don't grab 2/3rds of the new subscriptions on your FIRST YEAR of operations unless your price is the best. And by best I do not mean $1 less per month than the competition. Surprise suprise, last year wasn't profitable but lets up the payments now and see how many of those 66% we can keep just by having given them 1 cheap year.
It seems a bit odd to me that a company would go into any kind of market without doing some kind of research into how much it's going to cost them. To say they underestimated is one thing, but the figures they're talking about are huge, and would have put a lot of companies out of business.
I for one can not afford to pay a penny more than I already am, but I guess we should have all seen this coming. I am not sure about everyone else, but I am simply outraged. We are required to have health insurance, or are severely fined, and now rates are going to go up? When does the financial bleeding ever end!
This is a backwards concept. We are losing money so now we must increase our prices. Why don't you guys trim out the fat in your daily business practices. Make things run more efficient.
It's been proved time and time again that the government screws up just about everything they touch. They've always been good at a few things like national defense and emergency response. But the private sector is better at just about everything. When you take away incentives and add bureaucracy and red tape, try to make everything "fair", and put it all in the hands of corrupt political hacks and agencies, it won't likely turn out so well.
I just don't see how people blame the government for this particular event. Some people don't like this Medicare stuff, I get that part. But this is an independent non-profit organisation... thus probably already poorly managed and full of corruption like most non-profits are. Most non-profits are just non-profit in name, the company itself doesn't make a profit but the guys at the top of the ladder surely do. They just started out with super low fees (whether on purpose or not) and now need to increase those to keep their poorly run business functioning.
For me it's something confusing to have to pay for something that might or not happen and that is the base logic for all insurances. Raising the prize makes it even more scary, except for insurance companies of course.
It all depends on how much you are willing to risk. I would not dare to live a single day in the USA without proper health insurance, the $xx or even $xxx per month won't destroy your finances.. but if you get stuck with a hospital bill of $20k that very well might put you into big trouble financially. This is in Europe: Recently a relative of mine had to get an ambulance to take her to the hospital. Amount the ambulance charges? about 250 euros. Amount she had to pay? 16 euros, rest was paid by the government. Not sure how much she paid for the hospital stay but I do know that it's nothing that would cause financial trouble.
