{"id":14697,"date":"2013-02-20T05:30:19","date_gmt":"2013-02-20T10:30:19","guid":{"rendered":"http:\/\/www.patheos.com\/blogs\/geneveith\/?p=14697"},"modified":"2013-02-19T22:40:20","modified_gmt":"2013-02-20T03:40:20","slug":"insurance-rate-shock-under-obamacare","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/geneveith\/2013\/02\/insurance-rate-shock-under-obamacare\/","title":{"rendered":"Insurance “rate shock” under Obamacare"},"content":{"rendered":"\n<\/head>

The cost of health insurance will go up dramatically under Obamacare, people are starting to realize.\u00a0 This will be true especially for the young healthy types that aren\u2019t buying insurance now but will soon have to; that is to say, the currently uninsured<\/em>, the ones Obamacare is supposed to help!<\/p>\n

What a surprise!\u00a0 Who knew?\u00a0 Who could have guessed that would happen?\u00a0 How could forcing insurance companies to take everybody, charge everyone the same, and provide free services possibly raise insurance rates?\u00a0 I thought Obamacare was the way we were going to rein in health care costs.\u00a0 After all, the program is called \u201cThe Affordable Health Care Act\u201d!<\/p>\n

Yet more reason to wonder, how can Obamacare possibly\u2013even theoretically\u2013 work?<\/p>\n

From N.C. Aizenman in the Washington Post:<\/em><\/p>\n

Many young, healthy Americans could soon see a jump in their health insurance costs, and insurance companies are saying: It\u2019s not our fault.<\/p>\n

\n

The nation\u2019s insurers are engaged in an all-out, last-ditch effort to shield themselves from blame for what they predict will be rate increases on policies they must unveil this spring to comply with President Obama\u2019s health-care law.<\/p>\n

Insurers point to several reasons that premiums will rise. They will soon be required to offer more-comprehensive coverage than many currently provide. Also, their costs will increase because they will be barred from rejecting the sick, and they will no longer be allowed to charge older customers sharply higher premiums than younger ones. . . .<\/p>\n

Supporters of the law counter that concerns about price hikes are overstated, partly because federal subsidies will cushion the blow.<\/p>\n

The insurers\u2019 public relations blitz is being propelled by a growing cast of executives, lobbyists, conservative activists and state health officials. They increasingly use the same catchphrase \u2014 \u201crate shock\u201d \u2014 to warn about the potential for price surges.<\/p>\n

Aetna chief executive Mark T. Bertolini invoked the term at his company\u2019s recent annual investor conference, cautioning that premiums for plans sold to individuals could rise as much as 50 percent on average and could more than double for particular groups such as the young and healthy.<\/p>\n

The danger of rate shock has also become the favored weapon of conservative opponents of the law, repeated in a drumbeat of op-eds and policy papers in recent weeks.<\/p>\n

The argument is a powerful one because the success of the law, which was the signature domestic accomplishment of Obama\u2019s first term, depends on enough people signing up for insurance, particularly healthy people. The issue is surfacing as the most recent significant challenge in implementing the health-care overhaul. . . .<\/p>\n

Yet even analysts who favor the law concede that it will result in higher costs for some young, healthy people.<\/p>\n

Most of the new rules that could push up premiums will not apply to plans sponsored by large employers, only to those sold to individuals and small businesses. These policies will be available on insurance marketplaces, or \u201cexchanges,\u201d that the law sets up in each state beginning in 2014, and that are ultimately expected to serve about 26 million people.<\/p>\n

The law will require insurers to offer a generous package of benefits for exchange plans, including coverage of maternity care, prescription drugs and treatment for mental illness. It also caps customers\u2019 out-of-pocket expenses.<\/p>\n

\n
Many 20-somethings who buy their own insurance have plans that are considerably skimpier. So, under the new rule, they will be getting and paying for more, whether they want the added coverage or not.Another key driver of higher prices: Insurers will no longer be able to turn away or charge more to people with preexisting conditions. Perhaps most significantly, insurers will be allowed to charge their oldest customers only three times as much as their youngest. In most states, older customers are paying at least five times as much.<\/article>\n<\/div>\n
\n
The result: Older, sicker people will pay lower premiums. Younger, healthier people will pay higher ones to make up the difference.The price of a policy for a young, healthy man in, for instance, Milwaukee, could triple from $58 per month to $175, according to a survey of insurers released by Douglas Holtz-Eakin, president of the American Action Forum, a center-right think tank, and a former director of the Congressional Budget Office.Insurers argue that such increases could prompt many healthy young adults to opt out of coverage, skewing the insurance market so heavily toward the old and sick that it implode<\/article>\n<\/div>\n\n

via Will young adults face \u2018rate shock\u2019 because of the health-care law? \u2013 The Washington Post<\/a>.<\/p>\n

Plus, if you smoke<\/a>, your rates will add a surcharge of 50%.\u00a0 Even though what constitutes smoking\u2013actually the regulation refers to \u201cusing tobacco\u201d\u2013so as to trigger the surcharge has not been defined <\/a>(a pack-a-day habit?\u00a0 an occasional cigar? or, as one criterion states, using tobacco sometime during the last 12 months?<\/p>\n

And smokers tend to be poorer than non-smokers.\u00a0 So poor people who can\u2019t afford insurance are going to get hammered by the law making them get insurance and making it even more expensive than it is now.\u00a0 True, the government will pay a subsidy if your income is low enough, but that just spreads the cost to all taxpayers.<\/p><\/div>\n<\/blockquote><\/body><\/html>\n","protected":false},"excerpt":{"rendered":"

The cost of health insurance will go up dramatically under Obamacare, people are starting to realize.\u00a0 This will be true especially for the young healthy types that aren\u2019t buying insurance now but will soon have to; that is to say, the currently uninsured, the ones Obamacare is supposed to help! What a surprise!\u00a0 Who knew?\u00a0 […]<\/p>\n","protected":false},"author":1281,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,26,30],"tags":[2446,1614,2447],"class_list":["post-14697","post","type-post","status-publish","format-standard","hentry","category-economics","category-law","category-medicine","tag-health-insurance","tag-obamacare","tag-smokers"],"yoast_head":"\nInsurance "rate shock" under Obamacare<\/title>\n<meta name=\"description\" content=\"The cost of health insurance will go up dramatically under Obamacare, people are starting to realize.\u00a0 This will be true especially for the young healthy\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.patheos.com\/blogs\/geneveith\/2013\/02\/insurance-rate-shock-under-obamacare\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Insurance "rate shock" under Obamacare\" \/>\n<meta property=\"og:description\" content=\"The cost of health insurance will go up dramatically under Obamacare, people are starting to realize.\u00a0 This will be true especially for the young healthy\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.patheos.com\/blogs\/geneveith\/2013\/02\/insurance-rate-shock-under-obamacare\/\" \/>\n<meta property=\"og:site_name\" content=\"Cranach\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/cranachblog\/\" \/>\n<meta property=\"article:published_time\" content=\"2013-02-20T10:30:19+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2013-02-20T03:40:20+00:00\" \/>\n<meta name=\"author\" content=\"Gene Veith\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Gene Veith\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2013\/02\/insurance-rate-shock-under-obamacare\/\",\"url\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2013\/02\/insurance-rate-shock-under-obamacare\/\",\"name\":\"Insurance \\\"rate shock\\\" under Obamacare\",\"isPartOf\":{\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#website\"},\"datePublished\":\"2013-02-20T10:30:19+00:00\",\"dateModified\":\"2013-02-20T03:40:20+00:00\",\"author\":{\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#\/schema\/person\/f9ca8670bcc51908a78994c0484dbfa1\"},\"description\":\"The cost of health insurance will go up dramatically under Obamacare, people are starting to realize.\u00a0 This will be true especially for the young healthy\",\"breadcrumb\":{\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2013\/02\/insurance-rate-shock-under-obamacare\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.patheos.com\/blogs\/geneveith\/2013\/02\/insurance-rate-shock-under-obamacare\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2013\/02\/insurance-rate-shock-under-obamacare\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Insurance “rate shock” under Obamacare\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#website\",\"url\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/\",\"name\":\"Cranach\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#\/schema\/person\/f9ca8670bcc51908a78994c0484dbfa1\",\"name\":\"Gene Veith\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/054d79faea5d476edd8f99e5f14fb17f?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/054d79faea5d476edd8f99e5f14fb17f?s=96&d=mm&r=g\",\"caption\":\"Gene Veith\"},\"description\":\"Gene Edward Veith, Jr. is a writer and retired literature professor, serving as Provost Emeritus at Patrick Henry College. 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