Yesterday, a new survey from the Kaiser Family Foundation highlighted one of the problems in the individual health insurance market the Affordable Care Act was designed to address: unaffordable premium increases.
The survey was conducted before the Affordable Care Act became law and found that the average premium increase for consumers in the individual market was 20 percent and 77 percent of consumers in the individual market reported that they faced a premium increase. 40 percent of those who purchase their own coverage say they are “not too confident” or “not at all confident” that they will be able to pay their usual medical bills. More than 1 in 5 say that over the past year they or a family member covered by their plan didn’t get needed medical care because of the cost, and 20 percent skipped filling a prescription due to cost.
The Affordable Care Act will help address this problem and strengthen the health insurance system for everyone. The law starts by helping to prevent unreasonable premium increases by requiring insurance companies to publicly justify unreasonable increases. Companies will also have to spend more of your premium dollars on medical claims, not salaries and overhead. If insurance companies raise rates too high between now and 2014, they could be excluded from the new health insurance exchanges and lose access to millions of new customers. And we are encouraging states to crack down on premium hikes and providing states with $250 million in grants to do so.
States are already taking action:
Today, President Obama will be meeting with insurance company CEOs and insurance commissioners to discuss the Affordable Care Act and in the meeting, he will reiterate his pledge to help protect consumers from unfair premium increases. Later, he’ll announce the release of a new benefits for consumers in a speech in the East Room. You can watch the speech here at 11:45 AM.
Stephanie Cutter is Assistant to the President for Special Projects