In filings with the State of Illinois, insurance companies on the Affordable Care Act Exchange are seeking rate hikes that are astronomical. Highlights from those filings include…
1 – Blue Cross Blue Shield asked for an average increase of 27%.
2 – United Health is seeking a 21% bump.
3 – Celtic wants an extra 39%.
Several insurers are pulling out of the Illinois marketplace altogether. Aetna CVS, Health Alliance, and Quartz will no longer offer exchange plans in Illinois. Cigna Healthcare of Illinois will no longer sell marketplace plans in Cook County, but their plans will still be available elsewhere in the state.
Insurance companies blamed the price increases on growing health care costs and the increasing use of health care services. They also assumed that the enhanced tax credits that many now use to help lower their monthly premiums for exchange plans will expire at the end of this year. Tariffs were also a factor.
Whether you buy your insurance on the exchange or have a company sponsored medical plan, I’ll bet you dimes to donuts that your costs aren’t going to decrease any time soon. You’ll need to figure this in when planning your pricing structures to maintain your margins next year.
So much for the Affordable Care Act being affordable.
Let me leave you with this…
Chairman Powell opened the door for the Fed to cut interest rates as soon as next month saying that the prospect of a sharper slowdown in the job market might reduce concerns that cost increases due to tariffs would fuel inflation.
In response, the markets jumped almost 2 percentage points in half an hour.
Powell and his colleagues have held rates steady this year, pointing to a solid labor market and uncertainty over inflation given the tariff hikes. But Powell suggested that their outlook was changing in a way that could justify a resumption of interest rate cuts.
“The balance of risks appears to be shifting,” Powell said. He then added that while labor markets appear to be stable, “it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers.”
This has led to an unusual situation. Why?
Because the risks of a poor labor market are rising. Chairman Powell said. “And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.”
It should be noted that the interest rates set by the Fed control commercial lending. Most banks will charge at least 4 percentage points or more, higher than the Fed Funds Rate when doing a loan.
But residential mortgage rates are not controlled by the Fed. Those rates have more to do with how bond traders in New York feel about the risks of the future.
We’ll see how this all shakes out in the coming months. I’ll keep you posted.
Have a great weekend. It looks like it will be a nice one.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
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