Insurers blame rate rises on Obamacare

Major health insurers jack up premiums just in time for the midterms

Published September 8, 2010 3:10PM (EDT)

The Wall Street Journal reports that health insurance companies across America are jacking up their rates. Which has basically been the case every year, for years now. But this year, they can -- and will -- blame the Democrats.

The premium increases are happening at a terribly convenient time for insurers opposed to healthcare reform: Provisions voters like kicked in this summer, giving insurers an excuse to raise rates just before the midterms, to punish the socialists.

So the story is, Obamacare leads to rate increases. But insurance companies can only blame a fraction of the rises specifically on the new benefits they're required to provide.

For example:

Regence BlueCross BlueShield of Oregon said the cost of providing additional benefits under the health law will account on average for 3.4 percentage points of a 17.1% premium rise for a small-employer health plan. It asked regulators last month to approve the increase.

ODS in Oregon, planning a 21 point rise, can only pin 6 points on Obamacare. Celtic blames half of its 18 point increase on the bill. In other words, huge premium rises were on the way regardless, and even insurance companies themselves are only attributing a  fraction of the increases to the healthcare reform bill.

"About half of all states have the power to deny rate increases," the Journal reports, but even among those states the extent of that power varies widely.

The healthcare reform law's rate reviews -- which would force insurers to spend between 80% and 85% of premiums directly on healthcare -- don't kick in, of course, until 2011. So you can see why insurers might have an incentive to jack up rates now.

By Alex Pareene

Alex Pareene writes about politics for Salon and is the author of "The Rude Guide to Mitt." Email him at and follow him on Twitter @pareene

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