Insurance affordability was the great promise and premise of President Obama’s Affordable Care Act when he signed it into law in 2010. Three years on, Obama still promotes the law on this promise, claiming his signature legislation is making health care premiums more affordable. But a new report from the House Energy and Commerce Committee states health insurance premiums for some American consumers could rise by as much as 400 percent.
The report used information from the nation’s largest health insurance companies to estimate the emerging costs of Obama’s law. The conclusion was that health insurance premiums will rise, on average, by 100 percent—and some could increase by much more. For example, the average yearly cost for a new customer in the individual market will grow from $1,896 to $3,708—a $1,812 cost increase, the report states.
Obama has continued to promise his law will lower premium costs. On April 30, 2013 he stated, “… for the 85 to 90 percent of Americans who already have health insurance, they’re already experiencing most of the benefits of the Affordable Care Act even if they don’t know it.”
Devon Herrick, a senior fellow with the National Center for Policy Analysis, says it’s no mystery why premiums will rise: the burdensome regulations in Obama’s law.
“Insurers and health plans are in the business of underwriting risk. These new ACA requirements essentially force insurers to withstand higher amounts of risk, which of course insurers will have to charge for,” explains Herrick.
Increases in 90 Percent of States
The House Energy and Commerce Committee report shows individual consumers in about 90 percent of all states will likely face significant premium increases. The report cited one national insurer that predicts a 96 percent average increase for new customers in the individual market; another predicts small businesses in “nearly all states will see premium increases” in the small group market.
• California: Potential premium increases of 23 percent to 66 percent in the individual market and 37 percent in the small group market.
• Florida: In the individual market, example of 21-year-old male and female currently enrolled in less comprehensive plans could be hit with increases of 122 and 101 percent respectively; in the small group market, estimated increase ranged from 13 percent to 75 percent.
• Indiana: One example provided by an insurer showed a 101 percent price increase in the small group market.
• Ohio: Potential premium increases of 14 percent to 20 percent in the individual market and 28 percent in the small group market.
• Texas: Potential premium increases of 5 percent to 43 percent in the individual market and 23 percent in the small group market.
‘Not What We Were Promised’
Jonathan Ingram, a healthcare policy analyst with the Illinois Policy Institute, is not surprised by the higher premiums.
“One of the promises of the ACA was that it would lower the cost of health insurance premiums, but the administration is already talking about families paying between $2,000 to $2,500 more than what they currently pay for a premium. The Society of Actuaries said on average, costs would rise 32 percent as a result of ObamaCare. This is not what we were promised,” says Ingram.
Roger Stark, a health care policy analyst at The Washington Policy Center, says the president’s recent claim that ObamaCare-mandated state health insurance exchanges are driving down insurance costs is false.
“The rates submitted to Covered California for the 2014 individual market ranged from 2 percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions,” according to a statement from Covered California [the state’s health care exchange].
“California said prices will be lower in the exchanges, but that’s like comparing apples to oranges. What they need to do is compare [the same types of] policies to the private market. California has a very vibrant individual market. The price of an individual plan is often better than that of a small group plan. Comparing the two creates the illusion that the exchanges are lowering prices,” says Stark.
“I expect policies to go up between 60 percent and 70 percent next year, but many people will pay [even] more once the program starts in 2014,” he says.
House Energy and Commerce Committee: “Insurance Premiums Under the Affordable Care Act”
Society of Actuaries: “Report on the Costs of the Affordable Care Act”