Insurers are raising rates again this year, and a few are doing so to compete with the new Affordable Care Act.
Insurers said they are lowering premiums for many types of coverage, and for some categories, like auto insurance and homeowners insurance, there will be a slight increase.
However, the insurance industry will be left scrambling for additional revenue to fund its operations.
Insurance industry executives are also looking to raise rates for the 2018-19 fiscal year, which runs from September 1 through December 31.
“There’s no question that our premiums will go up,” said David S. Guggenheim, chief financial officer at American Insurers, the nation’s largest group of insurance companies.
The average increase in premiums for the fiscal year is around 2.2 percent, which will be more than double the average annual increase for the previous fiscal year.
The average annual premium increase is expected to be about 8.5 percent this year.
While there’s no guarantee that the increase will be large, there is some doubt about how much the increases will affect consumers.
Guggenheimer said that he and other insurers are looking at the impact of the Affordable Care Law, which took effect in 2014, and determining whether there is enough room for a higher premium.
“We are looking into whether there are enough of those costs to justify a more aggressive premium increase than we’ve seen in the past,” Guglenheim said.
It’s not just the Affordable Health Care Act that is driving the insurance companies’ premium increases.
They are also facing the effects of the recession, which has been hitting the insurance business hard, and rising health care costs.
One of the biggest factors driving the cost of health care is the cost associated with the costs of treating the people who have it.
The number of people who are insured for the first time is set to rise by about 7.4 million in 2020, according to the Congressional Budget Office.
For consumers, it means the costs associated with getting health care will be higher than ever.
A few years ago, insurance companies were able to lower premiums in order to compete for consumers who were paying higher premiums for their health insurance plans.
The Affordable Care Care Act made insurance companies more efficient, said Tom Hoenig, chief executive of Blue Cross Blue Shield of California.
However, since then, the cost to provide the same care to all people has gone up, and the costs to people with preexisting conditions have gone up.
“Insurers can’t compete anymore,” Hoenie said.
“The insurance industry is being hit hard.”
The Insurance Institute for Highway Safety, a trade group, has forecast that premiums will rise by between 8 and 10 percent this fiscal year in states that opted for the ACA, the Congressional Research Service reports.
However, Hoeni said that the rate increases will be small compared to the overall increases in the insurance market.
The rate hikes in states where the law was in effect will not be as large as they were in states without the law, Hienig said.
He said he expects the rate hikes to be in the 2 percent range, which is comparable to the 2.5 to 3 percent range seen in some other large markets like New York, New Jersey, and California.
Another factor that is keeping premiums high is the increase in health care spending, which increased at a slower rate than inflation, according a study by the Congressional Joint Committee on Taxation.
Hoenig said the increased costs of care are also a major factor driving the increased premiums, but that the increased demand is also driving higher rates.
More from Bloomberg Businessweek: Insurers say there’s room for growth as demand for health care services increasesIn a survey conducted last year by the Institute of Medicine, 70 percent of insurers surveyed said they expected to see increases in annual health care payments in the next five years.
The survey found that about a third of the respondents expected annual health benefits to increase at least 3 percent, while about 30 percent said they expect to see an increase in annual medical spending by 5 percent or more.
“The more you pay for your health care, the more you are paying for it,” said Jim Gorman, president of American Insurance, the country’s largest insurance company.
As of April 20, there were 6.8 million Americans who had coverage through their employer, according the Insurance Information Institute.
According to the Kaiser Family Foundation, more than 70 percent had insurance, and more than 10 million of them had coverage under a state-based health plan.