By Deena Winter | Nebraska Watchdog
LINCOLN, Neb. — Nebraskans will see the eighth biggest premium rate hikes in the nation under Obamacare, with premiums increasing an average of 74 percent for Nebraskans who buy their own insurance, according to a new study.
That compares to increases that average 41 percent nationally, according to a 49-state analysis of federal data on premiums by the Manhattan Institute, a free market policy think tank. The group projects that 41 states will see premiums go up in the individual health insurance market, as Obamacare requires insurance companies to provide 10 “essential benefits” covering things like mental illness and substance abuse, whether customers want the benefits or not.
The latest projections by the institute include the impact of federal subsidies in lessening the blow of rate hikes. People with incomes of less than $45,960 for singles and $94,200 for a family of four can get those tax credits.
The projected rate hikes seem to be bearing out in Nebraska, where 46,000 Nebraska policyholders have been sent letters from Blue Cross and Blue Shield of Nebraska notifying them their current plans will be terminated and they can buy new plans that comply with Obamacare mandates, usually for higher premiums. Lincoln accountant Todd Blome has been notified his premiums would go up 65 percent to stay on a similar plan, or 55 percent to go with the cheapest alternative offered by Blue Cross.
Stapleton ranchers Tammy and Kevin Fiechtner discovered their premium would stay about the same, but out-of-pocket costs will increase so much they can no longer afford health insurance, even though Tammy is battling colon cancer. The couple would have been eligible for Medicaid if Nebraska had expanded it, as originally envisioned by Obamacare’s authors. But since the state hasn’t done so, they can’t get on Medicaid and can’t afford Obamacare.
Nebraska’s congressional delegation has battled Obamacare, with U.S. Sen. Mike Johanns recently cosponsoring a bill to delay the individual mandate until the Healthcare.gov website is functioning. People can shop around for new insurance plans on the website, but it has been plagued with glitches since its Oct. 1 launch.
Omaha Sen. Jeremy Nordquist said the Manhattan Institute study used complicated methodology that makes several assumptions that push a point of view. The institute assumed every state expanded Medicaid, which he expects reduced the amount of federal subsidies projected, showing higher premiums.
Paul Howard, director and senior fellow for the Manhattan Institute Center for Medical Progress, said they did assume every state expanded Medicaid, but he doesn’t believe that skews the numbers upward.
“We think it’s actually pretty fair,” he said.
Nordquist said Obamacare gives Nebraskans “real insurance that will be there for them when they get sick” because come January, insurance companies won’t be able to deny or drop patients with pre-existing conditions.
“There is little value in having insurance coverage if it does not cover the services you need, has deductibles that are not affordable, or if it can be taken away by the company when you need it,” he said via email.
Howard stood by the analysis, saying he believes it’s a relatively accurate snapshot of the impact on premiums, with data down to the county level. Nebraska is likely seeing bigger rate increases because insurance was cheaper here than in states that had already enacted Obamacare-like laws, he said.
“It’s really where you started from,” Howard said.
While Obamacare supporters say those cheap policies often were bare-bones policies that didn’t cover much, Howard likens it to the kind of car 20-year-olds buy, compared to 65-year-olds: The twenty-something may not be able to afford or need a car with all the latest safety features, and are fine with something that gets them from A to Z.
“We don’t say everybody has to have the same policy,” he said, such as the mandate that a 27-year-old man’s plan have maternity coverage. “The same policy might not be right for you at a young age.”
Nordquist will continue to push for an expansion of Medicaid in the upcoming legislative session.
“There may be more expensive insurance options on the market that drive up the average, but Nebraska families can get coverage at much lower rates through the health insurance exchange,” he said. “Nebraskans now have options that they can compare and insurers will have to compete for business in a much more transparent marketplace.”
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