Affprdable Care Act Increases

There are going to be some fairly large rate increases on some of the affordable care plans as the market adjusts to the actual experience of the first few years.

What happened was that the people who signed up were in general sicker than predicted and used more services than projected.  Not sure if this is a result of the projections or the fact that many young people didn't sign up because they could continue coverage under their parents plans or felt it was cheaper to pay the penalty.

Now what was easily projected and what happened is that all the people with pre-existing conditions and chronic health conditions did sing up and getting them coverage is a very worthwhile objective.

It should be noted that increases in the first couple of years were very low due to some provisions inn the affordable care act so to some extent this increase is partly a result of that.

Couple of points.

First, the people who use the most health care are already signed up so the demographics going forward should improve as others decide to sign up.

Second, because of subsidies, the enrolled will not see these increases if they are eligible for the subsidies.  More people will become eligible so the increases are not as bad as advertised.

Third, in some states the number of providers is going to decrease and reduce competition.  This should be self correcting as insurers find out how to market profitable plans.  One solution would be to have some nationwide plans in the exchanges similar to the federal employees plans.

Fourth, This impacts a very small percentage of those getting health insurance and is going to look worse in headlines than it actually is.  The impact on any individual has to be determined and certainly it will be a hardship for some, but not most.

Fifth, The plan is structured this way to maintain market forces.  If we went to a single payer system it would not be an issue.  However, fixing a system that provides coverage to those who need it the most is still a worthy outcome.

This is how market forces work and the proposed rates may very well be a bit too high as we see the typical pendulum movement in the year to year predictions.  The gains from the affordable care act are not gone, millions have coverage, and the cost will find its level ultimately.