Preparing for Soaring Health Insurance Premiums

Gasoline prices are still higher than they were in early 2021, coupled with higher food and energy costs, and as if Americans didn’t have much to worry about on the inflation front, the surge in prices hit other corners of the economy. extends up to Health insurance premiums could soar in many states in 2023, according to a recent article.

Insurers in 13 states are proposing a median 10% increase, according to analysis by the Kaiser Family Foundation. State insurance regulators may scale back some rate hikes before they’re finalized, but New York insurers are calling for his as much as 46% rate hike, a figure still shocking. worth it.

Premium hikes reflect and exacerbate existing inflation problems. Healthcare providers continue to face staffing shortages when it comes to staffing clinics and hospitals. Rising labor costs, along with rising prices for energy and other medical supplies, mean hospitals and physician groups want to charge insurance companies more for their services. Of course, insurers will pass these higher costs on to American families in the form of higher premiums.

Congressional action exacerbated this trend by pushing insurance companies to raise interest rates. Lawmakers recently extended an expansion of currency subsidies included in the $1.9 trillion “stimulus” bill that Democrats passed last spring for another three years. These expanded subsidies will reduce the amount that people who buy insurance on the exchange will pay out-of-pocket for coverage and eliminate the previous income-based cap on subsidy eligibility.

While this may sound like good news to some families, it’s just a coincidence for insurance companies. With federal subsidies shielding most households from the impact of premium increases, insurers have every incentive to raise rates and get as much dollars out of Washington as they can. Taxpayers, on the other hand, will subsidize health insurance for families earning hundreds of thousands of dollars a year, allowing families to afford their own premiums.

Those who purchase individual insurance through exchanges will see the federal government pay higher premiums, but small businesses will not receive such a fortune. They will bear the brunt of these premium increases. will be faced with a difficult choice along the way. Small businesses, which don’t have the leverage of large corporations, either pass higher premiums on to their employees (at a time when businesses across the country are struggling to hire and retain workers), or face already narrow profit margins. You have to decide whether to absorb the surcharge.

In some cases, small businesses may find premium increases too out of reach and decide to stop providing coverage altogether. Citing analysis from Moody’s Investors Service, the journal says some firms can do just that. The Congressional Budget Office (CBO) recently said that a permanent extension of enhanced exchange subsidies, as desired by Congressional Democrats, would result in “a reduction in the provision of enhanced and consequent employment-based compensation. No wonder he concluded that [Exchange] Subsidy. “

Overall, the CBO believes that permanently extending enhanced subsidies would reduce the number of individuals with employer insurance by 2.3 million Americans. It would not only increase the size and scope of government, but it would also move people from privately funded to publicly funded coverage. would exacerbate the current inflation spiral that is currently facing.

Democrats named the law they passed in August the Inflation Reduction Act, which includes increased insurance subsidies and other spending measures. They were mostly right, but they were one word wrong. As the Journal article shows, the law does not drive prices down, but rather accelerates them. Call it the Inflation Act instead.

• Mary Vought is the Founder of Vought Strategies and Visiting Fellow of the Independent Women’s Forum (

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