Health Insurance Rate Hikes Coming Soon, Targeted At Freelancers And Small Business Employees

As if being a freelancer wasn’t hard enough already, many insurers say that health care reform is causing them to hike up rates, the WSJ reports.

Big insurers like Aetna and BlueCross BlueShield have asked state regulators for premium increases of 1 to 9 percent. That’s just to pay for the new benefits required under health care reform, the insurers say, and is on top of any other “regular” rate hike. In total, some consumers are facing rate increases of more than 20 percent.

The changes affect mostly individual policies and small businesses, and mostly affect new policies written after Oct. 1. But if a consumer modifies her existing plan and loses her “grandfathered” status, the rate hike would apply to her as well.

The White House’s response (which calculated that these changes would raise premiums by just 1 or 2 percent):

“The White House says insurers are using the law as an excuse to raise rates and predicts that state regulators will block some of the large increases.

“‘I would have real deep concerns that the kinds of rate increases that you’re quoting… are justified,’ said Nancy-Ann DeParle, the White House’s top health official. She said that for insurers, raising rates was ‘already their modus operandi before the bill’ passed. ‘We believe consumers will see through this,’ she said.”

About half of states have the power to block rate increases. Til then, if you need to make any changes to your freelancer insurance, might want to do so before Oct. 1.

(As a reminder, AvantGuild members get discounts on health insurance, but the plans offered outside New York are all individual, not group, plans. This doesn’t mean the rates might not be cheaper, but check with a pro before you do anything drastic.)