“Pricing will go up for all populations and some more so than others.”
Robert Hurley, eHealthInsurance
“Small employers purchasing new policies ...will experience premiums up to 20% higher...”
Oliver Wyman consultants
WHY AMERICANS WILL PAY MORE UNDER OBAMACARE
Upon implementation, a handful of Obamacare provisions will significantly add to the premiums that individuals and families will feel in 2014.
These requirements include:
·Guaranteed Issue and Community Rating
These requirements mandate that all applicants receive a policy and force individuals to pay the same premiums regardless of future anticipated medical expenses.
These price controls on health insurance have proved disastrous when enacted at the state level. Wreaking havoc on insurance markets leading to limited consumer choice and dramatically higher premiums.
An Oliver Wyman study concluded that because of these requirements,
“most people under the age of 50 will see their rates increase significantly.”
·Essential Health Benefits: Obamacare includes several requirements
that individuals purchase more expensive health insurance known as essential health benefits.
This includes coverage for categories of benefits (for example, coverage for preventive and wellness services, chronic disease management, rehabilitative and habilitative services). In addition, the law requires consumers to purchase plans that cover at least 60 percent of medical costs with limited cost sharing. These requirements restrict consumer choice in the design of their health plans and add to the premiums that individuals and families pay upfront.
CBO found that these requirements increase premiums because plans “would cover a substantially larger share of enrollees’ costs for health care (on average) and a slightly wider range of benefits.”
A study by the Council for Affordable Health Insurance (CAHI) found that in some state markets, mandated benefits increased premiums by as much as 50 percent.
One state estimates that essential health benefits will increase premiums by 33 percent for their residents.
Taxes and Fees on Plans, Drugs, and Medical Devices
Obamacare imposes$165 billion in new taxes and fees on health plans, drug manufacturers, and device makers. As noted by CBO in the case of plans and devices, these “fees would be largely passed through to consumers in the form of higher premiums
One study has found that the law’s health insurance tax will increase premiums over $2,636 and $7,186over a decade
The Department of Health and Human Services recently announced that plans sold on Obamacare’s new federal exchanges would also be assessed a 3.5 percent fee on sales. This fee will inevitably be
passed to consumers in the form of higher premiums. According to CBO premium projections, the annual cost of this fee alone is $180for individual and $500 for families
