Is Obamacare Going to Make Private Health Insurance Unaffordable for More People than it is Supposed to Help?

Wasn’t the point of Obamacare to provide insurance for the 4-6% of the population that don’t have it because they can’t afford it? I wonder how many people will be able to afford private health insurance after all of the premium hikes, not to mention how many companies are going to drop or decrease benefits as many have moved towards doing already. This will force most Americans into to either paying fines or using government health care. I don’t see how insurance companies will survive, (leading to of course more job losses), or how the U.S. can afford to provide healthcare for all of these people, especially taking in consideration our already staggering debt problem. It is clear that the amount of money being spent to implement ObamaCare pales in comparison to what is would have cost to simply extend some sort of  healthcare option for the 4-6% of people who truly need help affording healthcare, but don’t qualify for current government or charity options.


 Higher Health Insurance Premiums This Year? Blame ObamaCare

These premium hikes have outpaced general inflation and salary increases — and thus are swallowing a greater share of American households’ budgets. A study published in the September 2011 issue of Health Affairs found that burgeoning health costs have decimated nearly an entire decade’s worth of income gains. In 2009, the average American family had just $95 more to spend at will than it did in 1999.

Worse, there’s no relief in sight. Next year, employers expect premiums to rise 7.2%, according to the National Business Group on Health.

Over the next ten years, American families can expect rising health costs to continue to offset pay raises. According to the Kaiser study, premiums are set to reach a whopping $32,175 by 2021. And more than 50% of employers have stated that they plan to shift a greater share of health-insurance costs onto their employees.

ObamaCare is to blame for much of these impending increases. Richard Foster, the Chief Actuary for the Centers for Medicare and Medicaid Services (CMS), reports that America will spend an additional $311 billion on health care in the next decade because of the law.

CMS estimates the growth in health insurance costs will increase 10 extra percentage points in 2014 because of ObamaCare — a 14% increase, versus 3.5% without the law.

In 2020, the net cost of health insurance is estimated to be $271 billion. Without ObamaCare, that number would have been $248.7 billion — a difference of more than $22 billion. 

ObamaCare drives up the cost of insurance by piling mandates and required coverage benefits onto every single policy.

Consider the so-called “slacker mandate,” which requires all family policies to cover adult children until they turn 26. According to a recent federal report, nearly 1 million young adults gained health coverage this year thanks to the mandate.

Of course, adding them to their parents’ policies isn’t free.

Towers Watson found that the rise in young-adult enrollment was responsible for premium increases of as much as 3% at many firms.

Even the feds admit that the mandate means that families will pay more. According to HHS, each new dependent will tack on an additional $3,380 to their parents’ insurance costs this year. By 2013, extra dependents will add $3,690 to families’ annual insurance bills.

That cost impact is even more significant because most of those who seek coverage through their parents know that they’ll need care. This “adverse selection” issue results in a sicker — and thus costlier — overall insurance pool.

Or take the “essential benefits package” — the list of healthcare services that all policies must cover. Already, benefit mandates at the state level force up premiums by an average of 10.5%, according to Pacific Research Institute scholar Dr. Benjamin Zycher.

Slathering federal mandates on top of existing state mandates will drive costs even higher — and thereby make coverage unaffordable for more people. Massachusetts Institute of Technology economist Jonathan Gruber — a supporter and architect of ObamaCare — estimates that a 10% hike in the cost of the essential benefits package could increase the number of uninsured by 1.5 million.

There’s no way around it — ObamaCare isn’t saving anybody money. Americans should agitate for its full repeal and replacement– before they watch the cost of their health insurance consume yet another year’s worth of salary gains.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute. Her latest book is The Truth About ObamaCare (Regnery 2010).



3 responses

Maybe if you read the facts about Obamacare you would understand what a great thing it is. Firstly, you talk about all the costs of obamacare and not about the re enue it brings in. I know it might be hard to understand, but Obama did realize that his bill would cost a bit of money. So he accounted for this by taking $500 billion out of medicare and using it for Obamacare (which makes sense seeing it provides what medicare does plus much more). He also put a tax on citizens making over $250,000 which would increase revenue by over $20 billion a year. So it sounds like he sorta knew about the costs. Secondly, one of the major goals of Obamacare is to end privately held health insurance companies. Do you even know the horrible things these companies are doing to their customers. They only work for profit and will pull any heartless move to keep from paying bills. I urge you to watch Sicko by Michael Moore just to get a peek at the disgusting actions these health providers will take just to keep from paying what they should. Finally, you talk of government run health care like it is so terrible. There are many countries in Europe who utilize government healthcare like Denmark and it works fabulously. What is so terrible about every single citizen (at least legal citizen) in the United States being provided healgh coverage regardless of age, sex, preexisting conditions, current conditions, illnesses, and diseases? It sounds pretty good to me. And yes, its going to cost money, but I would be willing to pay a few extra cents in taxes to be able to pay for these great things. I urge you to try and understand the big picture before you go around talking so badly of things you obviously dont understand the whole of. And please stop spreading your pointless propoganda aimed at brainwashing anyone that reads this.

Anonymous, this issue is far more complex than any of us can get across in a blog post. I hope you will consider reading the classic essay (first published in the American Economics Review in 1945) The Use of Knowledge in Society. In this essay Professor Hayek (in a very accessible manner) details the importance of a market. The concepts in this paper are why I personally oppose Obamacare (as well as other attempts to distort prices).

We have distorted the principles of insurance – Michael Moore’s movie shows that sometimes they won’t pay for some procedures for cost issues. But government bureaucracies work the same way.

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