S.C. Department of Insurance released the first specifics on Friday about how the federal Affordable Care Act will impact health insurance prices here.
The department estimates the premiums for some plans may increase by 70 percent.
Insurance Department Director Ray Farmer qualified the announcement by saying most South Carolinians won’t be hit by any drastic change.
“Most people obtain their health insurance coverage through their employer so the Affordable Care Act will not affect most of our citizens because they are already covered and they are happy with that coverage,” Farmer said in an interview.
A news release published by the Insurance Department suggested the effects of the law are more dramatic.
“Due to a number of new federal requirements going into effect next year as part of the Affordable Care Act, consumers should plan for premiums to increase significantly,” Farmer said in the prepared statement. “Overall, we expect to see average rates increase by 50 to 70 percent in the individual market and 10 to 20 percent in the small group market.”
The agency did not estimate how the law will impact premiums for large group plans, which currently cover most residents. Farmer said in the interview that it’s virtually impossible to estimate how much someone’s insurance premiums will increase until Oct. 1, when the new federal health insurance exchange opens enrollment.
More than 906,000 uninsured South Carolinians will need to enroll in some type of health insurance next year to comply with the federal Affordable Care Act.
The Insurance Department compared proposed insurance rates with the rates currently available on the market, which is a difficult comparison because the Affordable Care Act establishes different rules for new health insurance plans moving forward.
For example, new health insurance plans must cover benefits such as maternity care and hospital stays. Even for the most basic plans, insurers will not be able to deny coverage to someone with pre-existing health conditions and cannot charge women more than men for health insurance. Those rules do not apply to plans on the market now.
“These additions and changes add unavoidable, additional expense for our customers,” said Elizabeth Hammond, a spokeswoman for BlueCross BlueShield of South Carolina, in a prepared statement.
Four companies — BlueCross BlueShield of South Carolina, Blue Choice Health Plan, Consumer’s Choice Health Insurance and Coventry Health Care of the Carolinas — will offer plans for South Carolina residents to purchase on the federal exchange. Even though the Insurance Department anticipates higher price tags, purchasing insurance will actually be cheaper than ever before for many people because the federal government is offering financial help to pay for it. Individuals earning up to $46,000 a year will qualify for federal subsides to help offset the cost.
The law establishes several ways to finance those subsidies, including fines for individuals who don’t purchase a plan and fines for large employers who don’t offer affordable health insurance plans to their employees. The Obama administration announced in July that it will delay enforcing the employer mandate until next year.
Farmer said 12 insurance companies will offer insurance plans to South Carolinians off of the federal exchange. Uninsured residents can purchase health insurance off of the federal exchange and still comply with the law, but will not qualify for the federal subsidies to help pay their premiums.
Doug Mayer, a spokesman for Gov. Nikki Haley, called Friday’s announcement that premiums may increase “as awful as it is ‘unsurprising.’ ”
“This kind of disastrous consequence is exactly why Governor Haley fought against Obamacare from day one and will continue to fight it until the day it’s de-funded or replaced with something that actually improves health care and lowers costs for families,” Mayer said.
Reach Lauren Sausser at 937-5598.