Obamacare premiums expected to dramatically boost consumer costs
Just days away from its launch, the Department of Health and Human Services has finally released premium rates for the 36 state Obamacare exchanges it will run. One analysis found many consumers are in for higher costs.
HHS proudly announced that the final premiums it’s decided on are lower than the Congressional Budget Office (CBO) had originally predicted. But though the prices are lower than the CBO had thought, both of those numbers are dramatically higher than what Americans currently pay. (RELATED: Lamar Alexander: Obamacare will increase some Tennessee premiums 190 percent)
The conservative Manhattan Institute for Public Policy Research compared HHS’s numbers to current insurance premium averages and found that Obamacare will almost double underlying insurance rates for the average 27-year-old man, Avik Roy reported in Forbes.
The situation is slightly less catastrophic for 27-year-old women, whose underlying insurance rates will increase by 55 percent on average. Forty-year-olds will see similar increases of 99 percent more per month for men and 62 percent more for women.
Those are just national averages, with some states hit harder. North Carolina will see women’s rates triple under Obamacare while men’s quadruple.
Federally-run exchanges aren’t the only ones with problems. In state-run exchanges — which released their data months ahead of the federal government — Obamacare increased premiums by 24 percent on average, according to the Manhattan Institute.
The young, who typically use fewer health services, must participate in Obamacare exchanges for prices to remain affordable for the older and sicker participants. But with HHS’s rates, 27-year-olds will experience massive premium increases, giving them a big incentive to pay the $95 fine for not purchasing insurance at all.
In Nebraska, the cheapest plan under Obamacare is 279 percent higher for men than it was before; women will see a 227 percent increase.
Across all 36 federal exchanges, there are just two states that will lower premiums for young exchange participants, as the Obama administration has promised. Colorado and New Hampshire alone will see a drop in premiums, by 36 percent and 8 percent respectively.
Obamacare proponents argue that these premiums don’t include the substantial federal subsidies for consumers earning up to 400 percent of the federal poverty line.
Subsidies are also available to those without “affordable” health insurance from their employer, at any income level. But Obamacare only counts individuals insurance costs into the “affordable” calculation, while entire families are often covered on employer plans. (RELATED: Obamacare ‘glitch’ costly for families)
The late release of the numbers may raise issues for insurance companies working in federal exchanges. As states that opted to run their own exchanges released their premium rates, some saw pushback against proposed rates.
Aetna withdrew from Connecticut’s insurance exchange after state regulators insisted the company charge lower insurance rates. Aetna, which was founded in Connecticut, released a statement that state rates would not let the company “to collect enough premiums to cover the cost of the plans.”
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