Obamacare Responsible for Huge Hike in Premiums

One of the major impacts of the Patient Protection and Affordable Care Act is that individuals and families will see higher health insurance premiums. Obamacare imposes several costly new mandates and restrictions on health insurers and providers that will raise health cares costs and therefore premiums. This paper lists a dozen factors that will contribute to higher premium costs.

1. Mandated Benefits

2. No Cost-Sharing for Preventive Services

3. Limits on Cost-Sharing (on Covered Items) and Limits on Deductibles

4. Minimized Youth Discount

5. Elimination of the Good Health Discount

6. No Annual or Lifetime Limits on Health Benefits and Mandated Coverage of Children Under 26

7. No Pre-Existing Conditions Exclusion and Guarantee Issue

8. Cost-Shifting Because of Low Medicare Reimbursement Rates

9. Taxes on Insurers, Pharmaceutical Companies, and Medical Device Makers

10. Difficulty of Enforcing the Mandate

11. Adverse Selection

12. Increased Demand for Health Care

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Reverse effect of Obamacare
The legislation was passed in March by the Congress and the president signed it.

Ironically today the insurance premiums are not falling but rising, probably as a direct outcome of the passage of ObamaCare, says the ‘Wall Street Journal’.

Reasons behind rising premiums
The Journal says that the insurers are citing the additional benefits, which they are required to provide under the new law, for increase in health insurance premiums.

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As far as the insurance premiums go, this is yet another example of ObamaCare bending the cost curve … upward. Why will premiums increase? Guaranteed issue and expansion of third-party payer services. Instead of exercising cost control through real reform, the new plan will intensify the existing structural problems of cost in the American health-care system. And since the covered won’t be paying that cost themselves, the rest of the taxpayers who don’t participate in the exchange system will be left with the bill through the federal subsidy program.

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Or maybe not so gradually, judging by the study released last last week by Richard Foster, the Obama Administration's Medicare actuary. Mr. Foster predicts net national health spending will increase by about 1% annually above the status quo that is already estimated to be $4.7 trillion in 2019. This is one more rebuke to the White House fantasy that a new entitlement will lower health costs.

"Although several provisions would help to reduce health care cost growth, their impact would be more than offset through 2019 by the higher health expenditures resulting from the coverage expansions," Mr. Foster writes—and that's assuming everything goes according to plan. He considers it "plausible and even probable" that prices in the private market will rise as greater demand due to subsidized coverage runs into the relatively fixed supply of doctors and hospitals.

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cpwill said:

we warned you this was coming. you cannot dictate economic reality by fiat. Insurance companies exist to analyze risk, not to provide social services. take away their ability to perform the first and attempt to force them to do the second, and these are the first-order kinds of results you get.


The state has given Anthem Blue Cross and Blue Shield the go ahead to raise premiums by as much as 47 percent for some members, and says health care reform is the reason why...

The new rates took effect Oct. 1, and include increases from 19 percent all the way to 47 percent depending on the individual, the Hartford Courant reported.

Sullivan responded to Blumenthal saying the new rates included "very rich benefits" mandated by federal law.

"There is not one person in the state of Connecticut who will see an increase in their current premiums based on what the department approved for Anthem and Aetna," Sullivan said in a release. "The rates that were filed and approved reflect the current cost to deliver care and the impact of more comprehensive benefit designs required under the federal healthcare reform law. If the attorney general wants to complain to someone, he should complain to Congress."..

"I find myself in an unprecedented place and time, as do my counterparts throughout the country, in overseeing one of the most far-reaching policy initiatives enacted by the federal government in recent history," Sullivan said in the letter. "It is unfortunate that this reform, while addressing insurer behavior, has provided little to no reform of the escalating costs of the health care delivery system."

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megaprogman said:

We just got the word from HR that our premiums are going to go down about $5/mo this year.

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Whovian said:

With no drop in coverage?

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MaggieD said:

This may be taken completely out of context. We'll never know. It depends on the policies that were effected. I've learned that what Corporate America says is the reason for a price increase may be anything but the reason. For instance, if this group of policies experiencing this increase are for high risk individuals, that increase is not at all surprising. My own health insurance premiums (until I opted into the State of Illinois' ICHIP plan) went up about 30% a year, every year until I switched.

Please link me to an Obama quote that says our health insurance premiums are going to go down as a result of this new healthcare legislation. Bettiin' ya' can't find one.

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How many people are getting insurance through their jobs right now? Raise your hands. All right. Well, a lot of those folks, your employer it’s estimated would see premiums fall by as much as 3,000 percent [sic], which means they could give you a raise.

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megaprogman said:

The only change is what is mandated by the new law.

The reason though is because in 2008, we laid a ton of people off, who all went and spent lots of money on medical issues during their severance period. Those bills are gone now and our expenses are way down as a company.

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Whovian said:

So, the new law is not causing the drop in premiums then.

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MaggieD said:

This may be taken completely out of context. We'll never know. It depends on the policies that were effected. I've learned that what Corporate America says is the reason for a price increase may be anything but the reason. For instance, if this group of policies experiencing this increase are for high risk individuals, that increase is not at all surprising. My own health insurance premiums (until I opted into the State of Illinois' ICHIP plan) went up about 30% a year, every year until I switched.

Please link me to an Obama quote that says our health insurance premiums are going to go down as a result of this new healthcare legislation. Bettiin' ya' can't find one.

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Whovian said:

A good lawyer would tell you NEVER ask a question you don't know the answer to...

LINK-WHITEHOUSE.GOV - Remarks by the President on Health Care Reform in Strongsville, Ohio

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MaggieD said:

OMFG!!!! This man is NOT to be trusted without a teleprompter!! You quite obviously found one!!!

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megaprogman said:

We just got the word from HR that our premiums are going to go down about $5/mo this year.

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Objective Voice said:

Frankly, I don't think insurance companies are being honest as to why they're raising rates. The only aspect of the health care law that has been enacted to date is establishment of the High Risk Pools (HRPs). But even they require the participants to pay a premium. So, it's not as if those who would be higher risk factors for insurance purposes are receiving their policies for free. Moreover, from what I've read of the state's part in financing these HRPs, they're receiving federal grant money. So, premimums shouldn't be increasing for anybody right now. And yet the blame for premium increases is being blamed on "anticipation of enactment of health care legislation"...really?

Only the HRPs are active.

No medical entity (insurance company) has been asked to accept clients who can't pay for insurance policies themselves; every client who takes part in the HRPs pay toward coverage.

States who participate in HRPs are receiving federal funds to offset the cost for establishing same.

None of the new health care taxes/penalties (whatever) have been implemented.

So, why the premium increases? Nobody really knows for sure, but Obamacare makes a very good scapegoat to legitimize them.

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Objective Voice said:

My premium remains the same; no increase AND I get to add my two oldest young-adult dependents back on my policy.

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Objective Voice said:

Frankly, I don't think insurance companies are being honest as to why they're raising rates. The only aspect of the health care law that has been enacted to date is establishment of the High Risk Pools (HRPs). But even they require the participants to pay a premium. So, it's not as if those who would be higher risk factors for insurance purposes are receiving their policies for free. Moreover, from what I've read of the state's part in financing these HRPs, they're receiving federal grant money. So, premimums shouldn't be increasing for anybody right now. And yet the blame for premium increases is being blamed on "anticipation of enactment of health care legislation"...really?

Only the HRPs are active.

No medical entity (insurance company) has been asked to accept clients who can't pay for insurance policies themselves; every client who takes part in the HRPs pay toward coverage.

States who participate in HRPs are receiving federal funds to offset the cost for establishing same.

None of the new health care taxes/penalties (whatever) have been implemented.

So, why the premium increases? Nobody really knows for sure, but Obamacare makes a very good scapegoat to legitimize them.

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“My broker told me that it’s because of health insurance reform,” she says.

They’re lying in blaming Obamacare, of course. Health insurance premiums have been going up since the 1990s, during the period when Clinton’s attempt to reform health care was killed:

But is it really?

Absolutely not, says Jay Angoff, who heads the Office of Consumer Information and Insurance Oversight for the U.S. Department of Health and Human Services. “It would be inaccurate and silly to blame it on the new law,” he says.

“To the extent that the insurance companies blame the new law for rate increases, they know better,” Angoff says. “They’ve said themselves that the new law would only raise rates by between 1 and 2 percent.”

And even those increases would pay for a number of new benefits.

And a couple of health insurance execs have admitted the industry’s lie:

Robert Zirkelbach of the insurance industry trade group America’s Health Insurance Plans concedes that, despite what some have claimed, the law isn’t the major driver of premium increases for next year. “In fact, the evidence is very clear that the rise in medical costs is a key factor in driving up health insurance premiums,” he says.

But, Zirkelbach says, in some cases, premiums could rise significantly because of new benefits the law requires. . .

Insurance industry consultant Robert Laszewski says there’s still another reason premiums are rising so rapidly right now, particularly for individuals: the bad economy.

“What happens in a down economy is that people who are healthy have a tendency to drop their health insurance sooner, maybe [because] someone in the household has lost their job,” he says. “But if you’re sick, you’re going to do everything you can — you’ll take a second mortgage on the house if you have to — to pay your health insurance premiums because you think that maybe you’re going to use the insurance.”

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