Obamacare premiums in 2015 will "skyrocket," anonymous healthcare industry officials said to The Hill on Wednesday.
The sources say Obamacare premiums will double in some states, in contrast to White House administration claims. One source, an insurance official from a populous swing state, said his company expects its rates to triple next year on the Obamacare exchange.
They attributed one cause of the looming increase to the law's troubled rollout.
Uncertainty left in the wake of the error-wrought start has insurers bracing for more late policy changes that could disrupt their business models, according to Reuters. Last week, administration officials said insurers may extend by two more years the health policies that were supposed to end in 2014 for being noncompliant with the healthcare law.
In a January interview with CNBC, Aetna Chief Executive Officer Mark Bertolini said his company's participation on the Obamacare exchanges in 2015 depends on whether the administration would allow it to raise rates enough to cover expenses.
The other major reason behind skyrocketing 2015 premiums is that not enough people in the crucial youngest demographic (18- to 34-year-olds) are signing up.
"There is extensive concern about rate increases next year," Avalere Health Vice President Caroline Pearson said to The Fiscal Times. "Particularly since early exchange enrollment is skewed toward older enrollees, some are concerned that plans will need to raise prices in 2015."
Former Cigna exec and current Bipartisan Policy Center senior vice president Bill Hoagland said to The Hill, "My gut tells me that, for some people, these increases will be significant."
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While campaigning, U.S. President Barack Obama promised to enact a healthcare law that would "cut the cost of a typical family's premium by up to $2,500 a year."
But just last Wednesday, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius admitted Obamacare premiums will increase in 2015, contrary to prior administration claims.
"I think premiums are likely to go up, but go up at a slower pace [than they did previously]," Sebelius testified to the House Ways and Means Committee.
"They're going to have to backpedal on that," Hoagland said, tagging Sebelius' comment as a "pre-emptive strike."
Obamacare premiums in 2015 will vary depending on the region and carriers available. The older the population, or the fewer hospitals or insurance providers, the higher the premium.
Just two weeks away from the March 31, 2014, enrollment deadline, only 4.2 million Americans have signed up for Obamacare, according to the HHS.
Failing to enroll prior to the deadline will earn a $95 penalty or 1% of your income (whichever number is higher) on next year's tax return.
- The Hill:
O-Care Premiums to Skyrocket
Insurers Wary of Obamacare Unknowns as They Plan for 2015
- The Fiscal Times:
Insurers on Obamacare: Expect Premium Prices to Soar