Officials say to expect health insurance premium increases next year

The amount of money consumers across the country pay for their health insurance is likely to rise substantially after the final rules of the Affordable Care Act are put into place.

Susan Voss, the insurance commissioner for the state of Iowa, recently told lawmakers there she believes that health insurance companies are likely to substantially increase rates beginning in 2014, according to a report from the Des Moines Register. In a briefing for the state's House Commerce Committee, Voss said that people who pay for their own health insurance could see premium hikes that range into the double digits. Already, Voss signed off on proposals from Wellmark Blue Cross and Blue Shield to increase premiums 13 percent.

“People are very passionate about the cost of health care, especially health insurance,” Voss told the lawmakers, according to the newspaper. “And it's not fun to sit there for three hours and listen to people who may drop their health insurance, who have to make decisions about where they put their money. But at the end of the day, I have to go with the math.”

These changes are likely coming specifically because the Affordable Care Act is significantly changing the health insurance industry, the report said. A major driver behind the increases in healthcare premiums is the rule that insurance companies must begin providing coverage to consumers with preexisting conditions and expected higher claim costs. Actuaries concur that adding higher cost consumers to the insurance pool will increase health insurance premiums.

Voss also noted that some of the added costs come as a result of Americans taking more advantage of medical services, in general, rather than increased prices for medical care.

Potential solution to Medicaid concern?
Altogether, just 150,000 people in the state of Iowa currently pay for their own private health insurance, rather than an employer-provided plan, the report said. Within that state, though, there is some discussion about whether the government can expand its Medicaid program to cover the same number of people, but the topic has been controversial.

Of course, the Medicaid option may be more attractive to state officials if they move to take advantage of a new concession, according to the New York Times. As a means of trying to encourage states to expand Medicaid coverage to more people in general, the Obama administration recently said state governments could increase the premiums recipients pay for certain services, such as prescription drugs and non-emergency visits to emergency rooms. On one hand, this effort may be useful to states because it reduces their bottom lines and may even help to curb unnecessary emergency room visits, but experts also note that it could deter low-income Americans to avoid treatment altogether.

That, in turn, can lead to more significant health concerns down the road, which could cost everyone involved in the process – from state governments and hospitals to the patients themselves – significantly more, the report said. Another potential problem here is that the Obama administration's note to state governments didn't fully define what constitutes a “non-emergency” service, meaning that there will likely be a significant grey area that state governments and Medicaid recipients alike will have to worry about.

Other states, like California, have also seen requests from health insurance providers that would significantly increase premiums for those buying their own insurance, and many are now grappling with how best to meet a reasonable middle ground that will allow both residents and insurers to deal with the problem in a way they may find acceptable.