The largest health insurance provider in the state of North Carolina is requesting a 34.6 percent rate increase for customers in the state on individual policies under Obamacare.
The News & Observer in Raleigh reported that Blue Cross and Blue Shield has elevated the 25.7 percent rate request it initially made in June to 34.6 percent, laying blame for the hike on Obamacare for making it illegal for insurers to turn away chronically ill individuals requiring expensive medical coverage.
The rate increase, which will need to be approved by state and federal regulators, would effect approximately 380,000 North Carolina residents covered by Blue Cross on individual policies under the Affordable Care Act. The 34.6 percent rate increase is an average, ranging from 5 percent to 42 percent depending on the customer and type of coverage.
Most customers will not pay the entire rate increase, as the majority of residents enrolled in Obamacare receive federal subsidies to offset healthcare costs.
According to Blue Cross chief actuary Patrick Getzen, the health insurer has seen large shares of individuals with pre-existing conditions sign up for coverage since Obamacare took effect two years ago. The number has not been offset by younger, healthier individuals signing up for coverage, despite the Obama administration’s hopes.
In fact, about 6.6 million taxpayers nationwide elected to pay a penalty for not having health insurance imposed this year under Obamacare, which exceeded the administration’s estimate by 10 percent.
Getzen also explained that the company’s 2014 healthcare costs in North Carolina amounted to $123 million more than its revenue, even as Blue Cross received $343 million in reinsurance and assistance from the federal government to help ease Obamacare expenses.
In addition to requesting rate hikes, Blue Cross is also eliminating plans in parts of the state, a move that will effect coverage of 55,000 residents come January.
Health spending endured a notable increase in 2014 because of Obamacare, growing by 5.5 percent to $3.1 trillion–or $9,695 per person, on average–according to a report published by the Center for Medicare and Medicaid Services’ Office of the Actuary (OACT) this week.
Health care spending is expected to increase by 5.8 percent on average from 2014 to 2024.