TakeAway: According to a detailed modeling of insurance rates, private insurance premiums could triple under ObamaCare. Oops.
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Excerpted from WSJ: The WellPoint Revelation, Oct. 28, 2009
How will ObamaCare affect insurance premiums in the private health-care markets?
Despite indignant Democratic denials, the near-certainty is that their plan will cause costs to rise across the board.
WellPoint mined its own actuarial data to model ObamaCare in the 14 states where it runs Blue Cross plans.
In all of the 14 states WellPoint scrutinized, ObamaCare would drive up premiums for the small businesses and individuals who are most of WellPoint’s customers. (Other big insurers, like Aetna, focus on the market among large businesses.)
Young and healthy consumers will see the largest increases—their premiums would more than triple in some states—though average middle-class buyers will pay more too.
What distinguishes the Wellpoint study is its detailed rigor.
Take Ohio, where a young, healthy 25-year-old living in Columbus can purchase insurance from WellPoint today for about $52 per month in the individual market. WellPoint’s actuaries calculate the bill will rise to $79 because Democrats are going to require it to issue policies to anyone who applies, even if they’ve waited until they’re sick to buy insurance. Then they’ll also require the company to charge everyone nearly the same rate, bringing the premium to $134. Add in an extra $17, since Democrats will require higher benefit levels, and a share of the new health industry taxes ($6), and monthly premiums have risen to $157, a 199% boost.
Meanwhile, a 40-year-old husband and wife with two kids would see their premiums jump by 122%—to $737 from $332—while a small business with eight employees in Franklin County would see premiums climb by 86%.
It’s true that the family or the individual might qualify for subsidies if their incomes are low enough, but the business wouldn’t qualify … And even if there are subsidies, the new costs the bill creates don’t vaporize. They’re merely transferred to taxpayers nationwide—or financed with deficits, which will be financed eventually with higher taxes.
For the average small employer premiums would rise by 94% in Indianapolis, 91% in St. Louis and 53% in Milwaukee.
A family of four with average health in those same cities would all face cost increases of 122% buying insurance on the individual market.
And it’s important to understand that these are merely the new costs created by ObamaCare — not including the natural increases in medical costs over time from new therapies and the like.
Apparently health care isn’t one huge free lunch in which everyone gets better insurance while paying less.
http://online.wsj.com/article/SB10001424052748703567204574499034177212064.html?mod=djemEditorialPage
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