Rising Premiums Rankle People Paying Full Price For Health Insurance

Enlarge this image toggle caption Steven Bush/Courtesy of Shela Bryan Steven Bush/Courtesy of Shela Bryan

Shela Bryan, 63, has been comparing prices for individual health insurance plans since May, and she can't believe what she has been seeing.

"They cost a thousand, $1,200 [a month], and they have a deductible of $6,000," she said. "I don't know how they think anyone can afford that."

Bryan, who lives in Hull, Ga., a hamlet of about 200, was on her husband's insurance plan for decades. When he died in 2013, she continued his workplace coverage through COBRA, but she had to pay almost the full price of the insurance, or about $800 a month. But it was "the Cadillac of insurance," Bryan said, with low copays, prescription drug coverage and a $500 deductible.

That option will run out in a few months, so she is turning to the individual insurance market in what is shaping up to be the most expensive year for the 400,000 or so consumers in Georgia who buy their own policies but don't purchase them on the health law's marketplaces.

About 10 million Americans buy individual insurance coverage without cost-reducing federal subsidies on the marketplaces on the open market, according to the Congressional Budget Office.

In Georgia, consumers who don't get insurance through their employers or don't qualify for tax credits to help pay for policies they purchase are facing double-digit premium increases. Blue Cross Blue Shield of Georgia, the only insurer offering plans throughout the state, received an increase of more than 21 percent from the state insurance commissioner. Humana was awarded a 67.5 percent hike.

Prices are going up in other states, too. BlueCross BlueShield of Tennessee was granted a 62 percent rate hike, while state officials approved a 46 percent increase for Cigna. Florida authorities gave plans there an average 19 percent bump. And last week, Minnesota officials announced that premiums for the seven insurers on the individual market are rising 50 to 67 percent.

The insurers are now adjusting for some miscalculations, said Graham Thompson, executive director of the Georgia Association of Health Plans. "The prices are up this year, but our hope is that things will settle down after this year," he said.

While consumers have faced sticker shock, the insurers have faced what might be called "sicker shock." They are raising premiums after finding that many of the customers buying plans on the individual market were sicker and more costly to insure than expected when the health law was implemented.

Federal and Georgia officials note that customers can change plans each year to find a better price, but the switches can result in higher deductibles and changes in doctors and hospitals available to the insured.

Bryan, who makes just over the $47,520 limit for a subsidy, finds herself on her own in the individual market now. "I've worked ... all my life," said Bryan, a maintenance supervisor.. "We're the ones entitled to something, because we've worked. They tear me up in taxes and then they say my income is too high for a subsidy?"

She could end up paying as much as $14,000 in premiums for a pared-back policy, she said, which is $4,400 more than she is paying for the COBRA plan. The deductible would also rise by $5,800, and she wouldn't have drug coverage. The cheapest policies would amount to more than a quarter of her yearly income, or double her mortgage.

Bryan said she feels like she is paying for other people's subsidies with her high premium.

But Linda Blumberg, a senior fellow at the Urban Institute, says that's not how subsidies work. "It is not the people paying full premiums who are paying for the lower-income person," she said. Federal dollars are already allocated to do that.

"For a lot of modest income people, this can still feel expensive to them. I actually think we've underinvested" in the amount set aside for subsidies, she said. "I sympathize with it enormously."

Bob Laszewski, a health policy consultant in Washington, D.C., said the Obama administration needs to listen to the complaints of people who aren't getting assistance.

"These people are invisible," Laszewski said. The Affordable Care Act "is working very well for lower income people, but the Obamacare supporters missed the fact that if you're raising a family of four on $100,000, you're not rich. This is the ... guy who remodeled your house, who drives a pickup truck and he's wearing a Trump hat."

This flaw in the law needs correcting, he said. A wider range of insurance options, he said, could help more middle-class people afford coverage.

Individual insurance brokers said they are calling their clients, bracing them for higher premiums.

Athens, Ga., broker Jim Carrow said he's starting to hate his job. He once thought he was helping people. Now, he's delivering bad news.

"It's a mess," Carrow said. "I had one gentleman call me and I had to tell him that because he made $5,000 more this year, he won't be eligible for a subsidy. And who knows what he'll end up paying. It's just one string of misery after another."

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.