Health Insurers Warn ObamaCare Will Bring Higher Health Premiums

Health insurers are warning that the health care overhaul will bring substantially higher premiums when its major coverage provisions go into effect next year. Via The Washington Post:

The nation’s big health insurers say they expect premiums — or the cost for insurance coverage — to rise from 20 to 100 percent for millions of people due to changes that will occur when key provisions of the Affordable Care Act roll out in January 2014.

Mark Bertolini, CEO of Aetna Inc., one of the nation’s largest insurers, calls the price hikes “premium rate shock.”

“We’ve done all the math, we’ve shared it with all the regulators, we’ve shared it with all the people in Washington that need to see it, and I think it’s a big concern,” Bertolini said during the company’s annual meeting with investors in December.

Some of that is just shifting costs from the old to the young:

In many states, insurers charge a 60-year-old customer $5 in premiums for every $1 they collect from a 24-year-old. The logic behind that is that older people use health care more and generate more expensive claims than younger customers, so insurers need to collect more to help pay their bills.

But the overhaul will narrow that ratio to 3-to-1. That alone could cause the premium for a 24-year-old who pays $1,200 annually to jump to $1,800, according to [insurance industry trade group] AHIP. Meanwhile, the 60-year-old who currently pays $6,000 will see a 10 percent drop in price.

Is it any surprise that the law continues to struggle to find public support? 

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Marshall Gill||

    In many states, insurers charge a 60-year-old customer $5 in premiums for every $1 they collect from a 24-year-old. The logic behind that is that older people use health care more and generate more expensive claims than younger customers, so insurers need to collect more to help pay their bills.

    But the overhaul will narrow that ratio to 3-to-1. That alone could cause the premium for a 24-year-old who pays $1,200 annually to jump to $1,800, according to [insurance industry trade group] AHIP. Meanwhile, the 60-year-old who currently pays $6,000 will see a 10 percent drop in price.

    Carrousel. Now.

  • Shmurphy||

    So let's be honest here: as a 30 year old struggling to get by, am I completely fucked?

  • Calvin Coolidge||

    No, you can always move to .... no wait ... you can just refuse to buy ... no, not that either ... you can hope you don't get sick ... no, that won't work ....

    Yeah, you're pretty much fucked.

  • Anonymous Coward||

    I'm not going to say yes. I'm not going to say no. All I'm going to say is stock up on desensitizing lubricant.

  • ||

    Nothing is certain in life except death and penaltaxes.

  • freeAgent||

    Yes, probably. I don't think we know what the vouchers/whatever will look like for people who can't afford insurance...but yes, you're almost certainly fucked.

  • Calvin Coolidge||

    But, we can force insurers to take on more expensive clients, force them to cover more procedures, ban them from using their actuarial skills to properly price their policies, and costs will go down! That is the magic of government!

    Really, the explicit assumption that "once this law takes effect and everyone gets more for less, the people will come around to support it" is going to be awesome to watch as it plays out.

  • CampingInYourPark||

    Meh, I was told by a Buttplug it was only $10 a month more!

  • Jay Dubbington||

    Who here is honestly surprised by any of this? Anyone with half a brain knew all that bs that Obama and his sycophants spewed about affordable care was nonsense. This is all leading to single payer their true goal.

  • Red Rocks Rockin||

    And the irony is that in single-payer, healthcare on demand basically goes away because the state can't afford it.

    Mandating open pricing on healthcare services could have neutered a lot of the premium increases since people would be motivated to shop around within their provider network for the best prices ahead of time. But even something that simple was too difficult for our Best And Brightest.

  • Anonymous Coward||

    Now hold on a minute, Jay! If you like your health insurance plan, you can keep it! Unless you're one of the 7 million whose employers are going to drop them from their group plan. But if you get to keep yours, then you can pay more for it!

    USA! USA! USA!

  • Jay Dubbington||

    AC, it's sad but I actually read that first line in Obama's slow "I'm the smartest man in the room" cadence.

    The whole plan is a steaming pile of crap. I'm lucky enough to have fairly affordable insurance with my job, but I see people struggling and losing hours at work because companies are trying to avoid hitting certain thresholds that Obamacare dictates require providing insurance etc etc. It's just another example of some pie in the sky bleeding hearts thinking they can solve the worlds problems so they try to plug one leak and 10 more spring up.

  • CatoTheElder||

    You could easily tell by the name of the bill.

    Everybody knows that the name of a bill describes exactly the opposite of what it will accomplish, and this one is named "Affordable Care Act".

    Like the Privacy Act, the Paperwork Reduction Act, the PATRIOT Act, and numerous other example, it does exactly the opposite of its title.

  • Bill Baar||

    ACA really is a massive shift of costs from Seniors to the Young. Startling thing really...

  • freeAgent||

    I do wonder what will happen when all my young peers in their mid-to-late 20s realize that Obama has screwed them over. My guess is they'll find a way to blame this on evil corporations somehow.

  • Brandon||

    It's not even that. My parents, both in their early sixties, had their insurance go up 25% this year. I don't know who benefits from this piece of shit.

  • chorizo||

    Who could have ever predicted that artificially increasing the demand for a service would cause the price of that service to increase?

  • shamalam||

    Speaking as an "old guy", 60 in June, this will save me a pile of cash. I wish to extend my thanks to all of gen X'ers and Y'ers!!! I think I will schedule knee and hip replacements this summer. Aw, heck, I will just get all of my joints replaced 'cause there is a sale going on!

    The down side to my giddiness is that I have three kids, aged 18 to 25. This won't help them much, but what are kids for if not to abuse and steal from?

  • DaveAnthony||

    Your lifeclock crystal just turned red.

  • SumpTump||

    Sometimes dude you just have to smack it good.

    www.EliteAnon.tk

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement