Did all the health insurance prices go up in price after the obama health care went into effect?

  • by Dave
  • Sep 04,2016
  • 7 answers

Okay so i have this theory with supply and demand. When demand is high, prices tend to go up. But since obamacare made having health insurance mandatory, the demand for health insurance went up and on top of that, stable demand, since everyone is required to have health insurance. All the health insurance company knew this and decided to take advantage of people having to have to health insurance by law. So all the health insurance providers raised the insurance prices. Thats my theory. Do you think that theory is true? Did they raise the prices are obama care went into effect?


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Insurance Answers (7)

mbrcatz 6 months ago

Yes, all the prices went up.
But your theory is wrong. And, if you haven't noticed, about 11% of Americans STILL have no health insurance. So we went from 14% uninsured to 11% uninsured.
WHY did prices go up? Because:
1. everyone must now have inpatient drug rehab services covered
2. everyone must buy maternity benefits
3. Lifetime maximum benefits of $5,000,000 were eliminated - now there's NO lifetime maximums (and believe me, anyone who uses $5MM in their lifetime, is likely to use $20MM in their lifetime)
and mostly
4. Insurance companies can no longer exclude preexisting conditions. That means, people can wait until they are pregnant, or wait until they need surgery or cancer treatment, and THEN buy the insurance, which HAS to cover them.
That's the biggest reason - and the technical term for it is "adverse selection". It's like when the lottery has to sell you a ticket, AFTER you know what the winning numbers are. All it does, is drive up the prices for everyone.
And in case you didn't notice - insurance companies are pulling out of those exchanges left and right - they're losing HUNDREDS OF MILLIONS of dollars - that means, they're paying out hundreds of millions of dollars more in claims, than they're taking in, in premiums. If they don't either stop selling those policies, or drastically raise their rates to cover the losses, they'll get shut down by the state insurance departments.

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Insurance Pickle.com 6 months ago

A) You can't exactly take credit for a theory that is described in every single economics 101 book ever printed. It is called the theory of supply and demand.
B) Has almost zero to do with reason policies went up. 85% of the population was already insured. It just required a whole lot more to be covered, even if you didn't want the additional coverage. And, it required insurance companies to take everybody. So, someone eight months pregnant (or fill in name of expensive procedure) could sign up for coverage in December, stick the company with huge bills and cancel after January.
Anyway, all those additional claims, additional administrative cost, and additional taxes pushed the premiums up. Premiums aren't arbitrary. They pay the claims. If there isn't enough money to pay the claims, the premiums go up. The only way to lower premiums is to lower the cost of claims. They law addressed almost zero solution for that...the real culprit. Under this administration, pharmaceutical companies have jacked up drugs prices for no reason.

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Flower 6 months ago

The Obamacare law was written by and for insurance companies. They do raise rates all the time regardless of the law. The difference is people can get subsidized on premiums according to income and family size but that hasnt helped everyone. Its true every program the government implements, private industry tries to take advantage of for their benefit.

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Diane A 6 months ago

Mine went down actually, at least to start. But health insurance does not work on simple supply and demand. It needs people who pay premiums but do not utilize services to balance out high users. It also uses actuarial tables to adjust to high or low cost areas. Medicare pricing also impacts rates. It's complex, and often has no basis is reality.

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efflandt 6 months ago

Health insurance rates certainly did go up for most of us, plus higher deductibles for many people, and coverage for things some of us would never need at our age. That is because there were added taxes for medical devices and insurance company investments and increased accounting required. The only people it decreased for (unless their employer paid more) was expanded Medicaid coverage and supplements for people with lower income, but the increased deductibles could be a hardship.
I did not realize how much my health insurance cost and how much my employer paid towards it until I lost my job and COBRA coverage was $811/month which does not meet the AHCA definition of affordable (at 9.5% or less of income) even if I was making my former salary. So for many people, the Affordable Health Care Act was misnamed.

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Zarnev 6 months ago

Supply and demand is not relevant with intangible items like health insurance. The only big thing that limits the number of people any health company has is the amount of reserves they must keep to pay claims; the more people the more they have to pay and the more they must keep in reserves.
Little things that limit the number is doctor networks and the number of people working for the insurance company. The number of people insured and the number of doctors is linear. There needs to be enough employees to handle the number of people insured.
The reason that premiums increased is because the insurance companies can no longer keep people that have expensive medical bills out. They must take those people in. The theory behind 0bamacare is more people would sign up both healthy and not so healthy. The problem is the healthy people did not sign up.

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StephenWeinstein 6 months ago

No. For many Americans, health insurance prices went down.
Which, incidentally, had never happened before Obamacare. Before Obamacare, all health insurance prices always went up. It was only after Obamacare went into effect that any health insurance prices didn't go up.

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