With Obamacare set to go fully into effect in less than a year, the administration is finally publicly talking about how ACA will create higher premiums for certain groups of people. From the Wall Street Journal:
“These folks will be moving into a really fully insured product for the first time, and so there may be a higher cost associated with getting into that market,” Health and Human Services Secretary Kathleen Sebelius said. “But we feel pretty strongly that with subsidies available to a lot of that population that they are really going to see much better benefit for the money that they’re spending.”
Ms. Sebelius added that those customers currently pay more for their health care if their plans have high out-of-pocket costs, high deductibles or exclude particular types of coverage, such as mental health treatment. She also said that some men and younger customers could see their rates increase while women and older customers could see their rates drop because the law restricts insurers’ ability to set rates based on age and gender.
While it is true that subsidies will help some people, they will only be available to individuals who earn below a set income level. It is going to be a mixed bag for people in the individual or small group markets because of how the law is designed. The people the law was meant to help like older and sicker individuals will be subsidized by making younger and healthier individuals pay higher premiums.
The law did almost nothing to reduce the insanely high prices we pay for medical services; it mostly just shifted around who pays. Many will pay less, but others will pay dramatically more. For regular individuals there will be real winners and losers.
How much more certain people will pay is still a matter of serious speculation. Although people who qualify for subsidies will not pay the full price of these premiums, a new study from the Society of Actuaries projects non-group premiums will increase by 32 percent on average. We will need to wait until insurance companies submit their official bids for the exchanges to find out just how much premiums will increase and for what group of people.
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