The Corner

Obamacare Sticker Shock: It Gets Worse

“Already, the Affordable Care Act is helping to slow the growth of health-care costs,” President Obama boasted during his State of the Union address. Apart from the fact that the statement is untrue, the line will be a real howler next year, especially for the young people who so enthusiastically supported him.

Doug Holtz-Eakin, president of the American Action Forum, shows why. AAF conducted a survey of health-care insurers and found that premiums are going up for key groups as a result of the new health law — by a lot!

The survey studied individual examples in specific markets to show the impact of major Obamacare reforms.

The result? “The findings highlight the sticker shock in health care premiums that awaits the relatively young and healthy in both the small group and individual markets as the ACA is fully implemented. The survey finds cost of premiums for this group will increase by an average of 169 percent,” according to the AAF survey.

The survey asked insurers how the market reforms would affect policies for specific individuals and small groups in 2014 in Chicago, Phoenix, Atlanta, Austin, Milwaukee, and Albany. 

Milwaukee citizens will be hit hardest: The young and healthy can expect premium increases of 190 percent. The lowest premium increases in these big cities will be in Phoenix where young people will face a 157 percent premium increase.

Older, sicker people will see their premiums reduced as a result of the changes required by Obamacare, which limits how much insurers can use age and health status in calculating premiums. 

In Milwaukee, AAF found, older and less healthy people in the individual market will see average premium reductions of 15 percent. In Austin, premiums will be 32 percent lower for this group. The survey found that older and sicker individuals in all of these markets will see an average decrease in premium costs of just under 25 percent.

Many young people have lower incomes and therefore will be eligible for subsidized insurance to help offset the sticker shock. But they will still face higher deductibles, co-payments, and insurance premiums than they would absent the law. And taxpayers will be footing a much higher bill than if people had choices in a competitive market rather than insurance that is highly regulated by Washington bureaucrats.

According to a Politico article about the survey:

Robert Zirkelbach, spokesman for America’s Health Insurance Plans, said the report shows the wide variation of effects the law will have and illustrates the need to pay close attention to affordability.

“It’s important to go beyond simply looking at averages, because that will tell us what it’s going to mean for specific individuals and specific families,” he said.

He says the subsidies will be important to consumers but don’t change the underlying reality. “Subsidies don’t lower premiums any more that Pell Grants lower the cost of college tuition,” he said.

In any case, expect to hear more from Obamacare foes about its impact on premiums for some young, healthy people.

One of the goals of Obamacare is to draw many more young and healthy individuals into the insurance market. With prices like these, that is unlikely, even with subsidies. AAF provides more evidence of the failure of Obamacare in meeting its main goals of lowering costs and expanding coverage.

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