By Deena Winter | Nebraska Watchdog
Updated 11:50 a.m. Friday
LINCOLN – Todd Blome’s phone has been ringing off the hook this week with clients seeking tax advice after learning they’ll get a “shocking increase” in their health insurance premiums when Obamacare’s health insurance exchanges begin operating.
Letters have been landing in mailboxes all over Nebraska explaining the impact Obamacare will have on people who buy insurance coverage on their own, rather than through work.
Blome, a Lincoln accountant, understands: He got a letter, too.
Blue Cross Blue Shield Nebraska informed Blome his health care plan will terminate at year’s end, and if he wants to move to a similar plan his new premium will go up 65 percent, costing him nearly $4,000 more per year.
He distinctly remembers President Obama looking into TV cameras and assuring Americans “If you like your health care plan, you’ll be able to keep your health care plan. Period.” Blome’s letter says otherwise.
“Stupid me, I took the president literally,” Blome said.
Many other Nebraskans are getting similar letters. Blue Cross Blue Shield is notifying about 46,000 policyholders who buy their own insurance coverage of changes to their plans as a result of Obamacare. Most of them are learning that if they want to stick with a similar plan, their rates will go up.
“I would say on average, most customers will see some level of increase, but we do have several thousand that are seeing a rate decrease,” said Tom Gilsdorf, director of product development for Blue Cross.
He said calls about the letters have been “brisk,” that Obamacare is “becoming very real for them” and people are “pretty surprised.”
This squares with a recent analysis by the Manhattan Institute that found Nebraskans would be among the hardest hit in the nation, with rates more than tripling for young people.
The study says 27-year-old men in Nebraska will see a whopping 279 percent increase in premiums and 27-year-old women in Nebraska will get an also-shocking 227 percent increase in rates.
Our neighbors to the west in Colorado, meanwhile, will see rates drop 36 percent for their 27-year-olds. Only one other state, New Hampshire, will see a decline.
Nebraskans also fared horribly when they analyzed the 40-year-old group. They found 40-year-old Nebraska men will pay 288 percent — the second highest increase nationwide — more under Obamacare, and women will pay 237 percent more — the biggest increase in the nation.
The analysis was based on data about Obamacare’s impact on premiums in states where the feds will partially or fully operate new insurance exchanges, released Tuesday night by the U.S. Department of Health and Human Services. People can begin shopping for insurance on the exchanges on Tuesday and get coverage beginning Jan. 1.
U.S. Sen. Deb Fischer, R-Neb., cited the study Thursday on the floor of the Senate.
“Those numbers, Mr. President, are absolutely staggering,” she said, calling for the program to be defunded.
So why is Nebraska getting hit especially hard by Obamacare?
Yevgeniy Feyman, a fellow at the Manhattan Institute, a free market policy research think tank, who helped do the analysis of Obamacare, said Nebraska has very low insurance rates and a relatively unregulated insurance marketplace where companies can sell a broad range of plans. Part of the reason Nebraska’s rates will go up more is insurance isn’t heavily regulated here, whereas in some East Coast states they already have some of the mandates now being implemented by Obamacare.
The average premium for 27-year-old Nebraskans on the most basic Obamacare plan is $159, compared to $68 now.
“It’s going to be a huge, huge hit,” Feyman said.
Bruce Ramge, director of the state Insurance Department, also took a look at the HHS numbers that came out this week, and he agrees that most Nebraskans’ rates will go up.
“There’s going to be some hefty increases,” he said.
His boss, Gov. Dave Heineman, has loudly opposed Obamacare.
Omaha Sen. Jeremy Nordquist said part of the problem is Nebraska didn’t take full advantage of Obamacare by expanding Medicaid and creating its own exchange and trying to create more competition in the marketplace. The governor refused to do both. An organization representing insurance carriers warned lawmakers at the National Conference of State Legislatures that states that don’t expand Medicaid would see higher premiums, he said, because insurance companies would shift the cost of that uncompensated care.
Gilsdorf said companies are no longer allowed to offer low-end, basic plans and must offer plans that include the “10 essential benefits,” such as mental illness and substance abuse treatment and dental and vision coverage for children.
“We are definitely moving into a much more regulated environment,” he said.
And while subsidies will be available to help low-income people, the Manhattan Institute concluded most people with average incomes who had individual insurance plans will pay more under Obamacare.
“I would say that’s true,” Gilsdorf said.
Blue Cross estimates about half of its customers who buy their own insurance will be eligible for those tax credits, which are available to a family of four earning between $23,550 and $94,000, for example.
Gilsdorf said the letters going out to Blue Cross customers show people the price to move to a comparable plan, but they have the option of choosing other, cheaper plans.
But in Blome’s case, the cheapest option offered by Blue Cross is still 55 percent more expensive than his current premium. He will check out the rates on the federal exchanges when they begin operating next week, but suspects the prices won’t be much different.
While he likes the fact that Obamacare requires companies to provide insurance to people with pre-existing conditions, like his 12-year-old diabetic son, he’s not happy about the extra $4,000 he’ll have to cough up for health insurance next year.
“There were a lot of swear words in my house last night. We had to tell the kids to cover their ears,” he said. “It means less money into my pocket right now.”
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