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Brokers say premiums are skyrocketing

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Brokers say health premiums are rising so sharply that, in some states, increases are in the triple-digits and overall might be among the worst yet.

And, what’s more, they blame the premium inflation almost entirely on the Patient Protection and Affordable Care Act.

The figures come from Morgan Stanley’s health care analysts, who conducted a survey of 148 brokers. On average, they said, increases are in excess of 11 percent in the small group market and 12 percent in the individual market. But some states show increases 10 to 50 times that. All of this, analysts concluded, is “largely due to changes under the [PPACA].”

Among the states seeing huge increases in the individual market, Delaware leads the pack with a whopping 100 percent increase. Following are New Hampshire with a 90 percent increase, Indiana at 54 percent, California at 53 percent, Connecticut at 45 percent, Florida at 37 percent, Michigan at 36 percent, Georgia at 29 percent, Kentucky at 29 percent, and Pennsylvania at 28 percent.

In the small group market, consumers might want to stay away from Washington. There, brokers reported a 589 percent increase. Other states suffering from skyrocketing small group increases are Pennsylvania (a 66 percent increase, California (37 percent), Indiana (34 percent), Kentucky (30 percent), Colorado (29 percent), Michigan (27 percent), Maryland (25 percent), Missouri (25 percent), and Nevada (23 percent).

Specifically, analysts said the acceleration in annual renewals is due largely to changes in the commercial market, including inclusion of the industry fee (and the gross up); 3:1 age bands; underwriting restrictions such as community rating and guaranteed issue; and new benefit designs.

This month’s results are up from Morgan Stanley’s last survey of brokers in December. Then, brokers said rates were rising in excess of 6 percent in the small group market, and 9 percent in the individual market.

The financial services firm has been surveying brokers who sell coverage in the individual and small-group markets since 2011. Overall their surveys have shown that premiums have risen by negligible amounts in early 2011 and began falling by about 1 percent each quarter through the third quarter of 2012. Premiums began to climb again in late 2012, jumping significantly in late 2013.

Just how much premiums are climbing — or falling — under PPACA has been a major point of contention.

PPACA supporters — including the administration — have pointed to the law’s subsides, which help pay for insurance for lower-income Americans, saying they will offset any increase in costs.

Meanwhile, most consumers are bracing for the worst. A poll released last month by the Morning Consult found that 60 percent believe the law will likely increase their health care costs in the long run. Another 28 said their costs would likely remain unchanged, and 11 said they believed their costs will shrink.

Recent eHealth analysis also found that that health insurance on the individual market is much more expensive under PPACA. They said the average premium for an individual health plan selected through eHealth without a subsidy was $274 per month, as of Feb. 24, a 39 percent increase from the average individual premium for pre-Obamacare coverage. The average family plan cost $663 per month, up 56 percent from a year ago, eHealth said.

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