As expected: Health care costs rise … insurance rates going up

As we told you. When you start mandating coverage and benefits, the costs to provide care will increase. As such, health care insurance premiums go up. Remember, insurance companies in most cases must go to the state to request premium increases and they must prove why rates must increase. They states will soon be approving 20 percent-plus increases for some policies.

From the New York Times, who failed to tell readers this would happen before Congress set this boondoggle in motion. Conservatives bloggers told you this was coming.

Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.

Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.

In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.

In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

The proposed increases compare with about 4 percent for families with employer-based policies.

But I thought the “Affordable Health Care Act” was supposed to make health care affordable?

The double-digit requests in some states are being made despite evidence that overall health care costs appear to have slowed in recent years, increasing in the single digits annually as many people put off treatment because of the weak economy. PricewaterhouseCoopers estimates that costs may increase just 7.5 percent next year, well below the rate increases being sought by some insurers. But the companies counter that medical costs for some policy holders are rising much faster than the average, suggesting they are in a sicker population. Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits.

So the Times is trying to spin this, implying it could be a lot worse. Of course, health care costs – just like any industry – is effected by the economy of the country. Things are not going well, so therefore the price of goods and services could actually be going down in some sectors. Notice how the Times writes costs may increase just 7.5 percent next year. Oh, that’s awesome!

To be clear, insurance rates go up because the cost of care goes up. They are not just raising rates 20 percent and keeping the cash, the cost to provide the services you are demanding are going up for many reasons, and the government mandates are not helping one bit.