Here’s an Interesting Wrinkle in the Rate Shock Debate

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Here’s an email from a reader in California with an interesting wrinkle on the rate shock debate:

I’m self employed, with individual health insurance coverage, and my family is one of those whose current health insurance policy is being canceled and whose premium will rise once we purchase insurance on the CA exchange. But it’s not as simple as that. We signed up for our current policy in November 2011 (therefore no grandfathering) and the premium was substantially lower than the policy we had prior to that. In hindsight, I’m guessing that the premium for that newly introduced plan was so low because the insurance company knew it would have to be canceled in 2014. So, they weren’t going to incur a lot of losses or have to make provisions for a long claims tail.

The premium for our new insurance, purchased from the exchange, is going to be about what our original (pre-2011) policy premiums would have been now, allowing for the usual annual premium increases. So, yes, we’re having to move from cheaper to more expensive insurance. On the other hand, it’s very likely that the cheaper policy would never have been available in the first place without the ACA’s 2014 deadline for such plans. Of course, the insurance company didn’t clarify back in 2011 that this policy had a limited lifespan and would have to be replaced in 2014 with a new one.

I wonder if this is at all common?

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THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

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