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Sticker Shock: Obamacare Increases Premiums in 42 States

And at the current rate it would take nearly 50 years to sign up the 30 million projected to be enrolled within the next five.

by
Rodrigo Sermeño

Bio

October 22, 2013 - 12:04 am
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WASHINGTON – A comprehensive review has found that young people will see the largest increases to their health insurance premiums and insurance costs will go up in all but fives states for which data is available.

Enrollment in the Affordable Care Act’s (ACA) insurance exchanges has proven to be a somewhat daunting process amidst technical glitches and delays. A recent report says once individuals are able to get a quote for health insurance on an exchange, they might experience “sticker shock.”

Heritage Foundation analyst Drew Gonshorowski’s research showed that for most states premiums are higher compared to what was previously available before the rollout of the exchanges. For example, in the state of Oklahoma premiums increased by 60 percent for 27 year olds. Meanwhile, premiums have gone up by 175 percent for similarly aged Americans living in Arkansas. In the state of Texas, increases are even greater as premiums doubled for 27 year olds.

Gonshorowski’s analysis shows the hardest hit by the rate increases will be young adults. The ACA increases premiums for young people in at least 11 states by more than 100 percent. Many states double or nearly triple premiums for young adults. Arizona, Arkansas, Georgia, Kansas, and Vermont see some of the largest increases in premiums in the nation.

“A state that exhibits this clearly is Vermont, where the increase for 27 year olds is 144 percent and the increase for 50 year olds is still 60 percent, but far less,” he writes. “All states exhibit this relationship.”

The Heritage Foundation study uses a model to estimate what premium rates have been previously and what the new rates would be, using census data and weighted averages similar to those used by the Department of Health and Human Services. The study includes the 46 states and the District of Columbia.

Speaking at a panel Wednesday, Gonshorowski said there are many reasons for the increases in premiums, but one of the main drivers is the so-called “community rating” which limits flexibility for calculating premiums for a given risk pool.

“In the case of the Affordable Care Act premiums are allowed to be adjusted by age, within an age band, but not other factors,” he said. Gonshorowski added that before the ACA all states had an age band compression of 5 to 1, meaning that premiums for older enrollees could not be five times higher than for younger people.

“The ACA lowers this ratio to 3 to 1. This limitation leads to direct cost subsidization where lower-cost individuals pay more for premiums to mitigate costs for higher costs enrollees,” he said.

Larry Patterson, owner of a small glass shop in Dallas, Texas, said before the ACA came into effect he provided health insurance to his employees and even contributed money to their health savings account. After some of the early provisions of the ACA kicked in, he could no longer afford group coverage because of a rate increase and had to stop the contributions to his employees’ health savings account.

He noted that his employees under 27 years of age have opted to stay on their parents’ health plans, which has resulted in higher rates by skewing the average age of those left in the group.

The ACA includes a provision that allows young adults to remain on a parent’s private health plan until 26.

The enrollment of low-cost young adults is essential for the ACA, as noted by Ezekiel Emanuel, one of the architects of the federal healthcare law.

Comments are closed.

Top Rated Comments   
Come on now, look on the bright side. Premiums are going up in less than 90% of the states. More than 10% of the states are even seeing a drop!

A couple of more comments like that and I figure I'm qualified to take Carney's job.
44 weeks ago
44 weeks ago Link To Comment
anyone who is under 30 that can afford thousands a year for healthcare they will NOT use working a part time job is VERY few & far between zero and none! Not very many of those "young people" will suffer through 2 years of that kind of income drain for absolutely ZERO return on their money and instead of being all kinds of worried that the IRS will "take" their tax returns will just start to claim 2, 3, 4, 5, dependents on their income tax returns so that there is no money for them to take. The most callous generations that have been raised to only care about themselves and their instant gratification lifestyles are the same ones obumbles is pinning all his hopes on them just rolling over and paying for everyone else working their 1-2-3- part time jobs?

If you believe THAT will happen then I have a space station ready to sell to you with a brand new obamascare bumber sticker on it.....
44 weeks ago
44 weeks ago Link To Comment
Of course they are all going up anyone who believed what the Democrap MORONS promised with OBAMACARE i.e. coverage of 30-40 Million MORE people, compel pre-existing condition coverage, mandate a whole list of things that MUST be covered even where NOT appropriate either through age gender or religious conviction and who STILL believed it would be CHEAPER and more EFFICIENT must be a CRETIN.
44 weeks ago
44 weeks ago Link To Comment
All Comments   (17)
All Comments   (17)
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my friend's mother makes $79 an hour on the internet. She has been fired from work for five months but last month her check was $15468 just working on the internet for a few hours. over here....www.Bay95.ℂom
44 weeks ago
44 weeks ago Link To Comment
So who among us still thinks this has anything to do with health care?

This entire scheme is little more than a monster case of regulatory capture by insurance companies that have become cronies of Obama and his crew, with the added incentive for Democrats to include disguised tax increases that will eventually piss off even their base.

One more example of the ongoing criminal enterprise that is the Democrat party.
44 weeks ago
44 weeks ago Link To Comment
I'm 33 and my insurance will go up 145%, under Obamacare, costing >$3000 a year. I can't afford insurance.
44 weeks ago
44 weeks ago Link To Comment
When asked for their take on the report, the bloggers at the Daily Kos replied "Shut up. Shut up! SHUT UP! SHUT UP!!!!"
44 weeks ago
44 weeks ago Link To Comment
40,000,000 uninsured people. 76 days to sign up (10/1-12/15) = 526,316 people need to be able to sign up each day. Subtract poor website performance for 22 days. 40,000,000, 53 days 7,500,000+ / day!!! Not gonna work
44 weeks ago
44 weeks ago Link To Comment
Oops, typo: 750,000+/day.
44 weeks ago
44 weeks ago Link To Comment
and it is time to take back the language.

People who can't sign up or don't sign up are not going to get fined, THEY ARE GOING TO BE TAXED.

and when government speaks of a subsidy for people, what they mean is MORE TAXES on others.

Anyone notice the 40% excise tax that a person with cadillac health insurance is going to be subjected to. Maybe that is why unions are really upset because can you imagine having insurance, and taking care of your employees or self and because you did so to the best of your ability you are now going to be taxed an extra 40%.

44 weeks ago
44 weeks ago Link To Comment
I believe the 40% excise tax for Cadillac plans starts in 2016 for employer plans costing in premiums more than $10,200 for an individual and something like $27,000+ for family. The 40% is placed on any amount in excess of those thresholds. Employers will have three choices: eat the excise tax, pass the tax on to employees, cut down on benefits.
44 weeks ago
44 weeks ago Link To Comment
Mr. Sermeño
I found this page a few days ago, it is a bit wordy, but read please read it and see if it does not say the penalty will be per month. The link is from Cornell University Law School.
http://www.law.cornell.edu/uscode/text/26/5000A
44 weeks ago
44 weeks ago Link To Comment
I take it to mean that you are penalized (read: taxed) for any month you go without proper insurance. If you're w/o for 1 month, at the end of the year you pay 1/12 of your total penalty.
44 weeks ago
44 weeks ago Link To Comment
Come on now, look on the bright side. Premiums are going up in less than 90% of the states. More than 10% of the states are even seeing a drop!

A couple of more comments like that and I figure I'm qualified to take Carney's job.
44 weeks ago
44 weeks ago Link To Comment
What if they held a healthcare takeover and nobody came?
44 weeks ago
44 weeks ago Link To Comment
That bit about Colorado rates staying the same is not quite true. It may be true that equivalent plans cost the same, but last year my son could purchase a minimal coverage plan (for accidents). This year he has to buy a bronze or extortion plan with a bunch of unnecessary stuff in it for more than double the minimum plan.
44 weeks ago
44 weeks ago Link To Comment
But now he'll have maternity coverage in case of an accident.
44 weeks ago
44 weeks ago Link To Comment
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