Cost increases with Obamacare

More bad news for the coming Obamacare trainwreck.  From the Associated Press:

Medical claims costs — the biggest driver of health insurance premiums — will jump an average 32 percent for Americans’ individual policies under President Barack Obama’s overhaul, according to a study by the nation’s leading group of financial risk analysts.

The report could turn into a big headache for the Obama administration at a time when many parts of the country remain skeptical about the Affordable Care Act. The estimates were recently released by the Society of Actuaries to its members.

While some states will see medical claims costs per person decline, the report concluded the overwhelming majority will see double-digit increases in their individual health insurance markets, where people purchase coverage directly from insurers.

The disparities are striking. By 2017, the estimated increase would be 62 percent for California, about 80 percent for Ohio, more than 20 percent for Florida and 67 percent for Maryland. Much of the reason for the higher claims costs is that sicker people are expected to join the pool, the report said.

The report did not make similar estimates for employer plans, the mainstay for workers and their families. That’s because the primary impact of Obama’s law is on people who don’t have coverage through their jobs. . . .

Obama has promised that the new law will bring costs down. That seems a stretch now. While the nation has been enjoying a lull in health care inflation the past few years, even some former administration advisers say a new round of cost-curbing legislation will be needed.

Bohn said the study overall presents a mixed picture.

Millions of now-uninsured people will be covered as the market for directly purchased insurance more than doubles with the help of government subsidies. The study found that market will grow to more than 25 million people. But costs will rise because spending on sicker people and other high-cost groups will overwhelm an influx of younger, healthier people into the program.

Some of the higher-cost cases will come from existing state high-risk insurance pools. Those people will now be able to get coverage in the individual insurance market, since insurance companies will no longer be able to turn them down. Other people will end up buying their own plans because their employers cancel coverage. While some of these individuals might save money for themselves, they will end up raising costs for others.

via Obamacare Will Cause Medical Claims Costs To Jump 32 Percent: Study.

See also this for another angle on Obamacare woes.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • DonS

    What a stunner! Who could have seen this coming? I’m shocked, shocked that prohibiting health insurers from using actuarily sound practices in issuing insurance coverage would cause premiums to skyrocket! Incredible.

    I guess the somewhat good news is that the individual market will be the worst hit, since its prior practice of screening our poor health risks gave it a much healthier insured pool than the employer coverage market. However, that news is tempered by the fact that the Obamacare taxes on employers, and their skyrocketing premiums from already higher prior rates will cause many employers to drop coverage, throwing their employees into the exchanges to face the skyrocketing individual premiums on their own. Of course, they need not get insurance at all until they get sick, so that’s what many will do. That should work well.

    As Nancy Pelosi said back in 2010, we need to pass the bill so we can see what is in it. Now we see. Disaster. Should be an interesting year.

  • http://www.bikebubba.blogspot.com bike bubba

    Lessee….artificially increase demand without increasing supply, what happens to the market clearing price……

    ….why is it that people in DC never seem to process their ideas through a basic supply and demand graph?

  • Steve Bauer

    Who is John Galt?

  • Jon

    +1 for DonS.

    Of course this is going to cost more. It is speading the wealth around. It’s only an “affordable” care act for those who couldn’t get coverage before, and the rest of us are going to pay more for those folks to get it now.

  • http://theoldadam.com/ the Old Adam

    The liberals fibbed…again? And the people fell for it…again?

    BTW…’death panels’ (that they mocked) WILL become a reality, as well. We can pay more for the privilege of having our lives ended by Big Govt..

    Suckers.

  • Joe

    We really have to stop talking about health insurance. There is no longer health insurance in this country. Insurance allows the insurer to evaluate the risk of having to pay a claim in an insured as the means of setting the premium rate and the terms of coverage. If the risk is too great, the insurer can forgo the transaction or alter the scope of coverage. That is no longer legal. No insurers have to take all comers (no more preexisting conditions) and are mandated to cover all kinds of things for which the normal risk assessment would cause the insurer to forgo the transaction.

    What we have now is no longer insurance. It is simply a gov’t welfare program run by a select group of private companies. We all pay a tax (premium) and can access the benefit under conditions set by gov’t.

  • DonS

    “If you like your health care plan, you can keep your health care plan.”

    Yep. How’s that working out?

    As Joe says @ 6, there is no longer a genuine health insurance market in this country. Mandated benefits and guaranteed issue are incompatible with sound insurance practice. The worst part about Obamacare, though, is that it is yet another huge subsidy of the older generation by the younger generation, because of age banding and requirements limiting premiums for older people to no more than 3 times those for younger people. This, in combination with unsustainable social security and Medicare benefits, plus $60,000 per person in national debt. You’re welcome, younger generation! Keep pulling that Democratic lever, because they’re the cool party. You know, gay marriage and all that (oh, don’t look at their position papers from the 2008 campaign — not as cool then, apparently).

  • SKPeterson

    DonS @ 7 – It is an evolving paradigm shift.

  • fws

    I think Adam Smith would not have disapproved of universal health care.
    Why? What he writes in what he considered his most important work.
    No not THAT work…. the other one he thought was most important:
    “The Theory of Moral Sentiments”

    There is no free and unrestricted “Supply and demand ” for healthcare. Fact.
    Econ 101.
    Why? Demand for health care is inelastic except for purely elective procedures.
    If you or your Family need healthcare, you will spend , borrow, and beg on facebook and pay whatever it is that the “Market” demands of you.

    yeah. I know there are lots of caveats here. But at the end, the basic thrust of what I am saying IS true.

  • fws

    Adam Smith is Sooooo not Ayn Rand.
    Anyone here actually read this book of Adam Smith?

    here are the Cliff notes on wikipedia:

    http://en.wikipedia.org/wiki/The_Theory_of_Moral_Sentiments

    So my question is:
    Does anyone here agree with Adam Smith in what he concludes in this book?

  • dust

    fws….perhaps, but there are some folks who try really hard to do the right things and take care of themselves, at least in the good ole days, including me, just so that, part of which it would keep their health care costs down, not to mention, improving one’s overall quality of life.

    and that is still true today for me and my family. we try to eat right, exercise, keep stress at a moderate level, not only because we want to prevent and minimize trips to the doctor, but we enjoy that kind of lifestyle and it’s miscellaneous benefits….you know, a more abundant life if you will?

    but it does seem nowadays there are many more folks who could care less about taking care of themselves. no exercise, bad diets, couch potatoes, big drinkers and perhaps drugs and who knows what else. and their healthcare costs are going to be higher, at least it seems to me from my observations and common sense, plus my good friends who work in the health care sector say that’s the case as well, big spikes in certain high cost treatments now and coming down the road at a hospital near you!

    so it doesn’t seem fair that other folks premiums have to go up to pay for all those folks who can’t or won’t take care of themselves. does it to you? or at least, if you want to help it should be voluntary, not coerced by government elected by the 50.1%?

    well, at least we have some savings and can invest in the medical industries that will be needed to help all those folks and hopefully recover some of our losses with increases in the values of those stocks…and we’re sure that would get the approval of adam smith :)

    cheers!


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