Health Insurance: Premium hikes force patients to buy insurance… for insurance

More Patients Paying More for Health Insurance

Patients across the country are paying more for health insurance.

The Denver Post reports that patients in Colorado  buying health insurance on the individual marketplace can expect their premiums to go up by 20 percent next year.

“The increases are the largest in Colorado since the 2014 launch of the Affordable Care Act, also known as Obamacare,” the Denver Post notes. “In some parts of rural Colorado, premium increases will top 40 percent, according to figures approved Tuesday by the Colorado Division of Insurance.”

Colorado patients are only the latest targets of premium hikes. All summer long, patients throughout the country have been hit with higher health insurance premiums. Double-digit rate increases have become normal — with patients in Tennessee facing an “average rate increases of 59%.” It’s not much better in Oklahoma, where patients are bracing for a 42-percent increase in the cost of the state’s lowest-priced silver plan.

Buying Gap Insurance to Cover High Insurance Deductibles

In addition to higher premiums, patients are discovering another problem: high deductibles.

“With monthly premiums on health insurance going up, more people are choosing cheaper, high-deductible options,” Kaiser Health News states. “In 2016, more than 90 percent of people buying insurance under the ACA chose plans with an average deductible of $3,000 or higher.”

That’s leading to a crazy scenario: insurance to cover insurance.

Known as gap insurance, the limited benefit coverage provides patients with a high-deductible plan the option to buy additional insurance to pay the deductible.

“People see the prices of individual insurance and they say, ‘Boy, a $6,000 deductible seems really high. I don’t want something that gives me that much risk,’ ” says Ryan Hillenbrand, president of the Missouri Association of Health Underwriters. “That’s why [the gap insurance] market is heating up a little bit more.”

This should be a wake-up call for policymakers. When patients are seeing double-digit increases in their premiums AND are still paying thousands of dollars out-of-pocket before their insurance kicks in, it’s an obvious sign that our health care system is broken.

Quote of the Day: Insurance for My Insurance

“After I got off the phone with him, I realized: That’s actually just insurance for my insurance.”

Susannah Lohr, a 26-year-old freelance designer, summed up “gap insurance.”

Why Are Health Insurance Premiums Rising?

Why are health insurance premiums rising?

One factor: hospital services. Earlier this year, an independent analysis found that outpatient services are the biggest contributing factor to rising health care costs.

Fortune’s Sy Mukherjee reports that analytics firm Avalere “found that “hospital services, rather than high drug prices, are the primary roots of premium inflation.” 29.9 percent of rate increases are owed to outpatient services, which also account for 27.4 percent of insurance plans’ spending.

“Preliminary data indicate that drugs are not likely to have a disproportionate impact on premiums in 2017,” wrote Avalere senior vice president Caroline Pearson. “Instead, outpatient spending continues to drive premium increases.”

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