Are you ready for the sticker shock of double-digit health insurance premium hikes? You’d better be:
What’s gives? President Obama, after all, said he’d prevent these sorts of prices. His new health law gave state regulators the power to block premium increases. It even created a federal agency to oversee insurance rates. But these bureaucrats are spectators to the price hikes. They’re mere wallflowers. Even in the bluest of states.
Their silence is the best evidence of who is culpable for the increases. It’s the policymakers. It’s Obamacare. The President is accepting the premium hikes as an allowable consequence of his healthcare policies.
There’s buzz in Washington that to ease the price hikes, the Obama team may slow down some of the most expensive regulations. This might include the law’s mandatory community rating. One approach they’re said to be considering is allowing some of the historically based underwriting to stay in place for a time.
But premiums will still rise because, in the end, everything has a price.
That’s Dr. Scott Gottlieb at Forbes, speaking some plain sense. But we also have Kristina Ribali explaining who will get hit the hardest:
A new study released today shows exactly the opposite affect on premiums even with premium assistance.
Actuaries at management consulting firm Oliver Wyman predicted the laws age rating restrictions could mean a 42 percent hike in premium costs for people aged 21-29 when they buy individual coverage.
But President Obama repeatedly promised that we’d see a $2500 reduction in the cost of health insurance premiums per family, per year, and even “bring down the costs for the entire country.” And while this specific portion of the study focuses on individual premiums, the ACA is proving to increase the premiums for the majority of Americans as well. The study goes on to say that the increase in youth premiums will also destabilize the market due to the fact that many younger people will not be able to afford the higher rates and therefore will simply choose to opt out of coverage.
But, but — mandate, right? Wrong. George Will has that angle covered:
So, Lambert says, the ACA’s penalties are too low to prod the healthy to purchase insurance, even given ACA’s subsidies for purchasers. The ACA’s authors probably understood this perverse incentive and assumed that once Congress passed the ACA with penalties low enough to be politically palatable, Congress could increase them.
But Roberts’ decision says the small size of the penalty is part of the reason it is, for constitutional purposes, a tax. It is not a “financial punishment” because it is not so steep that it effectively prohibits the choice of paying it. And, Roberts noted, “by statute, it can never be more.” As Lambert says, the penalty for refusing to buy insurance counts as a tax only if it remains so small as to be largely ineffective.
You might have to go back to the Alien & Sedition Acts to find a worse piece of American legislation.