Obamacare to Drive Up Individual Insurance Rates by 88 Percent in Ohio


credit: Foter.com / CC BY-SA

Ohio's Department of Insurance has seen the result of Obamacare, and it is higher average rates for people buying individual health insurance.

The cost of health plans sold on the individual market will rise by an average of 88 percent, according to an analysis by the state's insurance regulators based on 214 proposed plans from 14 difference insurance companies. Now, that's an average increase across the individual insurance market, so the release also notes that "those costs do not specifically track with the premiums insurers charge individual customers. However, state regulators also say that "it is expected that these increases in costs will also translate to significant premium increases for many Ohioans."

The response to this from Obamacare's supporters is, by now, familiar: Yes, costs will go up in some cases, but health plans will offer more expansive coverage thanks to Obamacare's essential health benefits regulations; individual exposure to high health bills will limited and insurers will be more strictly regulated—required to sell you a policy at a regulated rate even if you have a preexisting condition.

It's worth breaking that down a little bit. Over at Forbes, Avik Roy takes a look at how the law's various coverage requirements increase the cost of coverage in the state:

What are the drivers of the increase? According to [a report by consulting firm] Milliman, the two biggest drivers are (1) risk pool composition changes, such as forcing the young to subsidize the old, and the healthy to subsidize the sick; and (2) Obamacare's required expansion of insurance benefits, particularly its mandated reductions in deductibles and co-pays.

This is a significant concept to understand. Some people have the impression that the main reason that rates are going up under Obamacare is because of the law's requirement that insurers cover people with pre-existing conditions. But that accounts for only a fraction—around a quarter—of the rate hike. The rest comes from all the other things that Obamacare does, such as forcing people to buy richer insurance benefits; to buy products with all sorts of add-ons they might not need; to pay Obamacare's premium tax; and to pay a lot more, if they're young, to subsidize older individuals.

Premium subsidies will reduce the impact on individual pocketbooks somewhat. But even factoring those in, it's not clear that young, single adults buying coverage under the law are ready for the costs it will impose on them. And, of course, those subsidies aren't free either. If costs rise, but subsidies hide some or all of the hike, that just means that taxpayers are making up the difference. 

NEXT: The Demonization Machine Cranks Up Against Edward Snowden

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  1. I don’t think young single adults are that stupid. Especially now that they’ve mandated pre-existing coverage and you will be able to sign up when you get sick. Who’s going to pay 83% more for something they don’t need especially now that they know they can always get it when they need it????

    1. These are the same young, single adults that bitch about the rising cost of college tuition every year while they’re signing their promissory note for more student loan debt.

  2. Wait, there are both premium subsidies and premium taxes? WHARRRRGARBLE

    1. Do you also get taxed on your subsidy?

      1. if your income increases and your subsidy level changes you’ll have to pay it back.

        oh, and the subsidies will be based on your 2012 return.

        1. Darn, I was looking for something at the degree of absurdity of England charging VAT on the excise tax paid for fuel at the pump. (Taxed on a tax)

          1. India does that, actually. There’s a 12% VAT, a primary education tax of 2% of the VAT and a secondary education tax of 1% of the VAT.

            My favorite bit of minor tax absurdity is Singapore’s 7/575 sales tax rate. Who comes up with these numbers?

            1. Scammers.

  3. On the plus side, the NSA and IRS will hear all our complaints about it instantly!

    1. wait, are we on the list? (again)

      1. Everyone is on the list!

        1. Everyone in this room is GUARANTEED to be on several lists. Consider it a badge of honor.

          And since they’re almost certainly reading this right now…they can go fuck themselves!

  4. It’s not 2014 yet, lalalalalalala, I’m not listening.

    You can’t blame anything on the ACA till then!!

  5. As an Ohio native, gotta’ admit that I love that pennant.

    1. I have to assume the red hole in the white circle was Warty’s idea.

      1. It’s the goatse of flags.

    2. As an Ohio native, gotta’ admit that I love that pennant.

      Why a pennant? I have always wondered (could google I guess).

  6. according to my math, Obama personally owes me every penny of the increase plus $2500 or 2500% of the premium.

  7. Once His Lordly Magnificence declares Jubilee on student debt, those kids will have plenty of extra cash flow to pay for health insurance.

    1. You need a job to have cash flow.

  8. The Unaffordable Healthcare Act strikes again.

  9. The whole thing is a huge exercise in everyone trying to shift costs onto someone else. Predictably, those costs will get shifted onto the least politically powerful group. Namely, young, single people.

    The big irony is that a lot of the young single people turning 26 this year probably voted for Obama in 2008.

    1. But it doesn’t work that way. It’s non-viable.

      Single young people may be the least politically powerful, but they’re also the most broke and the most deadbeat. They have no capacity to sustain this, might as well mandate that aborted fetuses pay for it.

      1. Well, that’s where the taxpayer subsidies come in.

        Just shift the costs onto the vast mass of nameless, faceless, others.

        And from there onto the nameless, faceless, yet unborn people of the future.

  10. Yeah, but those rednecks are in Ohio. That’s flyover country, so their premiums don’t count. Those hicks probably don’t even have operas or alt-text.

    1. Wicked is playing Columbus tonight.

      I guess it isn’t an opera but you get the picture.

  11. People will be taking full advantage of that additional coverage because they might as well since they are forced to pay for it.

    And with more people taking advantage of the coverage forced upon them, the costs will skyrocket because the demand is going to skyrocket while the supply of doctors, nurses, labs, and related professionals and facilities will not grow at all (and will likely shrink when they see how much more pressure is placed on them to get more work done).


    2. That’s going to be one of the secondary effects on pricing.

      The laws supporters argue that the whole point is to encourage people to get more preventive care. Although it’s unclear how much preventive care really affects outcomes. See the controversy over mammograms.

      But the hidden effect is that it’s going to encourage even more unnecessary testing and drive up costs that way. The same incentives that make people go for an annual doctor’s visit or a mammogram will make them get a “precautionary” MRI when they’re having migranes.

    3. “People will be taking full advantage of that additional coverage because they might as well since they are forced to pay for it.”

      Or what they could do is refuse to buy the overpriced insurance and avoid paying the penalty for not doing so by arranging their federal tax witholding allowances and/or estimated tax payments so that they are never due a tax refund. Taking the penalty tax out of refunds due is the only enforcement mechanism the IRS has (at this point) to collect it. It cannot garnish wages or impound someone’s bank account or use any of the other methods available to it to collect any “regular” taxes due.

      So someone could refuse to buy the individual insurance, avoid paying the penalty and then sign up for it later after the fact if they get a seriously expensive illness.

      1. Taking the penalty tax out of refunds due is the only enforcement mechanism the IRS has (at this point) to collect it. It cannot garnish wages or impound someone’s bank account or use any of the other methods available to it to collect any “regular” taxes due.

        And that is why it will change, despite the law explicitly saying that it can’t. For Chrissakes, this Supreme Court read this law to say that it was a tax, despite there being no language to that effect, and miles of legislative intent saying it wasn’t. Do you think the IRS is going to be stopped from collecting?

        1. You could be right.

          Afer all the laws says that the insurance subsidy payments only apply to people who sign up through the state run health insurance exchanges.

          The states that refused to set them up are getting exchanges run by the feds. The law as written does not allow for the folks signing up for those to get the subsidies but the IRS is claiming it has the authority to determine that they do.

  12. Wait, what does this have to do with Snowden?

  13. You know, this is going to make me sound smug and self-righteous, but …

    It’s nice to know that you’re on the side of the people who are so obviously, clearly, right, and against people who are so obviously, clearly, wrong.

    So many other issues are so nuanced. This one isn’t. This is probably how a progressive feels all the time, although in their case, the lack of nuance is a mental defect. In this case it’s real.

    1. That was supposed to be in one of the snowden threads.

      1. It is, however, still fitting.

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