But it turns out not even those steep price hikes were enough. Blue Cross Blue Shield of Texas released a statement on July 23 delivering the news that it was ending that line of coverage, affecting about 367,000 people. According to the company:
BCBSTX was the only insurer to offer an individual PPO insurance plan across the state to individuals in 2014 and 2015. Since the Affordable Care Act began, the market has changed. We found that the individual PPO plan was no longer sustainable at the cost it was being offered. Because we want to make sure that our plans are affordable, we decided to not offer individual PPO plans in 2016.
The law requires that we set our individual plan rates based on all of our individual members’ claims history. This means that if the costs of one plan are high, it will raise the rates of all other plans, not just the high-cost plan. If we kept the Blue Choice PPO, this would have raised the rates so much for all our other plans that most people wouldn’t be able to afford them. By dropping the PPO, we can still offer our other plans at reasonable rates.
So premiums went up significantly last year and that still wasn’t enough. The company calls a $400 million loss unsustainable. And it is, unless you are the Obama administration “investing” in say, solar panels.
As Blue Cross says in its statement, it could have just decided to spread out the cost over all its members, making everyone pay more—or what you might call the Obamacare model, since the president’s plan forces younger and healthier people to pay more so older and sicker people can pay less. Only it turns out the older and sicker people are having to pay more also.
But the company chose to end its popular PPO plan instead.
Such rate hikes were completely predictable. In fact, retired health actuary Mark Litow and I predicted it in the Wall Street Journal two years ago. But now the price increases are hitting the pocketbook—first ours, and now Blue Cross’s.
And if facing these predictable (and predicted) rate hikes wasn’t bad enough, the president continues to deny these things are happening. It’s one of the reasons why I think so many Americans no longer believe a thing Obama says. Can the man who tells us what an improvement Obamacare is be believed when he tells us what a great improvement his Iran nuclear agreement is?
As premiums rise, cancelations continue and doctor networks get even narrower, the Affordable Care Act will continue to be a major political issue as voters demand to know when the “affordable” part of the Affordable Care Act begins.
There’s a whole other half of this story you need to read as well. You’re eyes will cross.