Most of us have seen this coming for years. It’s unfortunate but true, health insurance premiums are increasing on average in the state of Utah by 30%. Yesterday the Obama Administration announced that premiums across the country will be increasing 25%.
So why is this happening? Well I can explain it. Hang in there with me.
- Spring of 2013: Health Insurance carriers were required to submit their premiums to the Department of Insurance for January 1, 2014 open enrollment, well before the Affordable Care Act would kick in.
- Spring of 2014: rolls around and the carriers have to submit premiums to the Department of Insurance for January 2015 plans.
- PROBLEM: They have no idea how much the cost of claims that will be submitted by their members for the full year of 2014 will be.
- Spring of 2015; the carriers submit rates for January 2016 plans.
- PROBLEM: They barely finished looking at claims for 2014 and they only have one year of claim history to determine rates for 2015
- Spring of 2016; the carriers submit rates for January 2017 with 2 years of claims history.
- REASON: the carriers finally figured out how much to charge for their premiums to stay ahead of the cost of their submitted claims.