Analysis: how much did each Obamacare mandate drive up health insurance premiums?

How each Obamacare mandate affected the health insurance premiums
How each Obamacare mandate affected the health insurance premiums

Since 2010, we were inundated with reports and studies from various groups that argued that the new mandates in Obamacare would drive up the cost of health insurance. And that was actually observed to happen. Year after year, health insurance costs rose – usually by double digits. We knew why this was happening, too: Obamacare required health insurers to cover more conditions, many of them not even related to health insurance.

Here is an an analysis of which mandates caused health insurance costs to rise the most from the Daily Signal.

Excerpt:

Obamacare caused premiums to rise for various reasons, chief among them being the vast new regulations the law imposed on insurance markets. A new analysis from Milliman backs this up. The study provided estimates of the average impact that various Obamacare regulations had on premiums.

[…]Changes in morbidity (or the sickness of the population) due to newly uninsured by itself caused 4 percent increases in premiums nationally, but in Ohio it raised premiums by 35-40 percent.

Age is also a factor in premium prices, and Obamacare disrupted the natural order by dictating the age banding, which disproportionately harmed young people. (Age banding here refers to how much the most expensive plans can be in comparison to the cheapest.)

Before Obamacare, the national rate of age banding was 1-to-5. In other words, the most expensive plan was five times more costly than the cheapest plan, with expense increasing with age.

Obamacare mandated that the rate be set at 1-to-3, so that the most expensive plan could be no more than three times as expensive. While elderly people’s premiums might have seen fewer increases—which is both due to banding and the fact that Obamacare is close to a death spiral—young people have suffered.

Overall, young people can expect to have rate increases between 58.9 percent and 91.8 percent using national averages. However, not every state had a 1-to-5 age band.

In places like Ohio, the effects are far worse—it had a 1-to-6 age band. Even accounting for the differences in its population from the national average, young people in Ohio can still expect to pay an average of 7.7 percent more on top of other increases.

In addition to this “youth tax,” mandates like the “essential health benefits” and actuarial requirements further punish all Americans with benefits that they don’t need, at prices they can’t afford. While in places like Maryland these mandates might only contribute 8 to 10 percent to premium increases, nationally they raise premiums by an average of 16.5 percent, up to 32 percent.

Overall, accounting for gender, age, and the relative proportions of all those groups, Americans are paying 44.5 to 68 percent more in premiums owing just to Title I regulations. That number is even higher when factoring all the other adverse effects of Obamacare.

Notice that “guaranteed issue”, which is so popular with those who feel that they can somehow be generous by spending other people’s money, is one of the biggest drivers of health insurance costs. When pollsters ask people whether they want to keep these provisions, they mostly say yes. But when the pollsters ask whether they want to keep these provisions if it means that their own health insurance costs will go up, they mostly say no. It’s amazing how American voters, especially Democrats, love the idea of spending other people’s money. As long as they don’t have to pay for it, then it’s a great idea to spend someone else’s money in order to buy the feeling (and the peer approval) of being generous and compassionate.

And after 8 years of Obama offering that feeling to his supporters, we now have a national debt of $20 trillion, instead of $10 trillion. Mind you, in decades of asking my co-workers, I’ve never yet met one Democrat who could tell me what the national debt was. I guess that would interrupt their feelings of generosity and compassion.

 

 

One thought on “Analysis: how much did each Obamacare mandate drive up health insurance premiums?”

  1. Prior to Obamacare I was getting max deductible ($5500) for $120/mo.

    My Bronze plan on Obamacare, the highest deductible they offered at $6600, went from:

    Year 1 – $130/mo
    Year 2 – $150/mo (20% increase)
    Year 3 – $250/mo (67% increase)

    I opted out of year 3 for Christian Healthcare Ministries which provides WAY better coverage for $150/mo for Gold level coverage. Even their Silver $85/mo and Bronze $45/mo plans provide better coverage then the high deductible.

    https://www.chministries.org/default.aspx

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s