Remember those lower health insurance premiums Obamacare would bring us? Don’t count on it—especially if you’re young. The Associated Press reports that a new analysis by Rand Health predicts premiums for young adults could rise as much as 17 percent under the new law.
The new age rating requirement is the culprit. It bars insurers from charging older patients much more than their younger, healthier customers. Today, the AP notes, “Insurers typically charge six or seven times as much to older customers as to younger ones in states with no restrictions. The new law limits the ratio to 3-to-1….” So how will insurers make up the difference? It will be “will be shouldered by young people in the form of higher premiums.”
The 17 percent premium hike predicted by Rand translates into $300-$500 premium increases for young adults. Other studies suggest even steeper price hikes. Jim O’Connor, of the consulting firm Milliman, Inc., predicts increases between 10 and 30 percent. ShoutAmerica, a Tennessee nonprofit, predicts increases as high as 50 percent.
And that’s just from the new age rating restriction. Other provisions, such as the rich benefits insurers will be required to offer in all health plans, will add further to premium prices.
And don’t forget the taxes. When asked if health premiums would go up, Aetna CEO Ron Williams responded, “The answer is yes, and some of the things that will drive those premiums are significant additional taxes the industry will ultimately have to pay in the first year.”
Heritage analysts have explained how premium increases will discourage young adults from purchasing insurance altogether, opting to pay the much less expensive penalty instead. That will only fuel a “death spiral” of out-of-control premium price hikes.
For lawmakers who really wanted to lower the cost of insurance and help more Americans buy it, Obamacare was the wrong way to go. To learn more about the right way, click here.