Well that was fast.
By late yesterday afternoon, as we were still digesting the news that Justice Roberts had sided with a decision to uphold the Affordable Care act, which is intended to make healthcare, you know, affordable, a coalition of health insurance companies was already banding together to voice their disapproval.
The official lobbying group for the industry, called America’s Health Insurance Plans (AHIP), released a statement yesterday saying “major provisions, such as the premium tax, will have unintended consequences of raising costs and disrupting coverage unless they are addressed.”
The “premium tax credit” means that consumers will be able to buy insurance through new “insurance exchanges” that will be created under Obamacare, and that when they do they’ll get a tax credit to offset its cost.
Shorthand: you’ll have options. Which isn’t good for the insurance companies.
Which is why the stock price of most major health insurance companies was down 2% to 5% yesterday after the Court’s ruling.
Still believe the coming price hikes the insurers are vowing will be “unintended?”
The reasons for health plans getting more expensive are confusing and complex, but some of the industry’s reasons for being unhappy right now are pretty clear. First, insurance exchanges equal competition, plain and simple. Second, it will soon be illegal to deny coverage due to pre-existing conditions, meaning that insurance companies are going to have to start paying for a whole bunch of coverage they’ve been denying for years, which is going to eat into profits.
The upside, of course, is that the industry is about to get flooded with new customers. Which is why Fox News reports the AHIP’s statement also praised “expanding health care coverage to millions.” It’s just not clear that companies will be in a position to maximize profits from the new customers.
If not, yesterday’s statement basically says, you’ve been warned: get ready to see your rates go up.