There was no good reason for the insurance companies to raise their rates. Because whatever changes the ACA made to the system the companies would
more than make up the difference with all the new policies they would be getting.
Sure there was a good reason: A whole slew of new drains on the pool of available money. Did anyone seriously believe that the abolishment of
pre-existing condition rules wasn't going to result in everyone else paying for those poor saps to be insured? They suddenly added millions of
Americans with very expensive ailments to treat onto the insurance logs. Since the law only allows rate discrimination against current tobacco users,
they had to come up with rates high enough that everyone would offset the expenses of the sick. That's simple economics.
Say you have 10 nonsmoking, insured people. Eight of them have "average" annual medical bills (let's say $1,000 per year, for example), One of
them will have a child in the next year (That's $25,000 minimum), and one is suffering from a major ailment (Being ridiculously conservative here,
that's $100,000 a year). That means those 10 insurance holders will account for $133,000 of medical outfalls in that calendar year. They've bucked
up the deductable for most everyone to ridiculous levels, but let's presume that each of these plans are the Silver level with a $5,000 deductable.
That leaves the insurance company to pay for $83,000, which they cover by premiums
. Divide $8,300 per insurance holder by 12 months and get
$692 a month! Under the previous system, that $100,000 a year drain wasn't placed on everyone else's shoulders.
Doing that math: 8 people at $1,000 a year, 1 lady bearing offspring at $25,000 a year = $33,000 for the year. Most plans had a $2,000 deductable, so
you had an insurance company covering $23,000 in a year (the 8 folks were at $1,000 actually paid all out of pocket thanks to the deductable while the
pregnant lady had to cover the full deductable) for a monthly premium of $213.
The previous system was actually a form of socialism in that everyone who was an "acceptable risk" was paying into a pot to cover their ass from
disasterous loss due to a major accident or illness. Now the system demands that risk be completely removed from the equation, guaranteeing
the presence of people who will be making massive drawdowns from the insurance system.
OF FREAKING COURSE THE RATES WERE GOING TO SKYROCKET!!! This isn't a fantasy world and the insurance COMPANIES aren't there to make Americans have
warm fuzzies and feel all snuggly inside, they're there to fill a need and make a profit while doing so. On top of all of this, how in the blue hell
would this failure not be even more complete if the individual mandate was removed from the equation? Guess what? Most of the country would still be
uninsured by choice
because only a damn fool is going to sign up for something that expensive while personally healthy themselves, just to
cover the asses of a bunch of ill healthed people they don't even know. Without the mandate, but with the law preventing pre-existing condition
discrimination, everyone would do the smart thing and not purchase a plan until they got sick... which would mean you'd have all 10 of the people
above drawing a hundred thousand bucks a year from the system and the whole damn thing would implode on itself.
The ACA is broken and doesn't make economic sense. It is intrusive on individual liberty and it is unrepairable. ABOLISH IT!