Second study this week shows ObamaCare will drive up premiums

posted at 2:41 pm on March 29, 2013 by Ed Morrissey

When I first read it, I thought this New York Times report from late last night was just late to the party.  The Society of Actuaries had already released its analysis of the damage that ObamaCare will do to health-insurance costs, and HHS Secretary Kathleen Sebelius had already admitted that prices would go up as government forced people to buy bigger comprehensive policies. CNN even went so far as to ask whether Barack Obama and his administration had “misled” voters over the costs of ObamaCare.

This study, though, is actually separate from the SoA’s analysis.  The state of California commissioned this new study for its state exchange to determine the impact of ObamaCare, and it matches closely to the SoA conclusion:

A study commissioned by the State of California says that the new federal health care law will drive up individual insurance premiums, but that subsidies will offset most of the increase for low-income people.

The study, issued Thursday in the midst of a growing national debate over the impact of the law, is significant because California is far ahead of most states in setting up a competitive marketplace, or exchange, where people can buy insurance this fall.

Premiums could increase by an average of 30 percent for higher-income people in California who are now insured and do not qualify for federal insurance subsidies, the study said.

It’s pretty close on the causes of the problem, too:

The report for the state insurance exchange, known as Covered California, cited several factors contributing to higher premiums: an influx of less healthy people into the individual insurance market, and a requirement for health insurance plans to offer richer benefits and to cover more of the cost of care than is now typical for individual insurance policies.

Another factor, it said, is that federal and state government agencies are imposing new taxes and fees on insurers, which are likely to pass on some of the costs to consumers.

“Health insurance will become relatively less expensive for people with chronic conditions and relatively more expensive for healthier people,” said Robert G. Cosway, an actuary at Milliman, a large consulting firm that prepared the report.

Put demographically, it means that younger workers will end up subsidizing older workers, who are much more likely to have the “chronic conditions” that drive up costs.  In terms of economic strata, the impact won’t fall on low-income workers, who will get big federal subsidies to buy plans in the exchanges.  It won’t impact the wealthy, who can absorb the higher prices more easily.  Who will get hit? Middle-class workers, whose subsidies won’t cover the increases, especially as those subsidies phase out in the 300%-400% poverty-level range.

No one who understands risk pools and the economics that drive them will be surprised by this outcome.  The problem is that no one who crafted this “reform” understood risk pools and the economics that drive them.

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Thanks for the info.

squint on March 29, 2013 at 2:44 PM

This is clearly a disinformation campaign funded by the Koch brothers.

steebo77 on March 29, 2013 at 2:45 PM

No one who understands risk pools and the economics that drive them will be surprised by this outcome. The problem is that no one who crafted this “reform” understood risk pools and the economics that drive them.

Well, that’s one perspective.

Another is that they know them well, but don’t care, as the real goal is hoping this will fail miserably, cause a great outcry, and the final result will be what they wanted all along – total single payer government run healthcare.

As introduced, Obamacare isn’t supposed to work; it is supposed to be painful, and is intended to be a stepping stone to the real goal.

Midas on March 29, 2013 at 2:46 PM

Obama is a liar charlatanic thug.

Sibelius is one of his Nurse Ratcheds.

Schadenfreude on March 29, 2013 at 2:46 PM

Obowmacare is gay…

Seven Percent Solution on March 29, 2013 at 2:47 PM

Anything to destroy the middle class is ok with these two.

pat on March 29, 2013 at 2:50 PM

Midas on March 29, 2013 at 2:46 PM

Bingo!

Oil Can on March 29, 2013 at 2:50 PM

Captain Obvious Strikes Again.

Grunt on March 29, 2013 at 2:51 PM

A sign of decreasing healthcare costs is rising healthcare costs.

BobMbx on March 29, 2013 at 2:51 PM

How come no one cared about the studies saying this before the rammed that stupid Bill down our throats?

Cindy Munford on March 29, 2013 at 2:52 PM

And for some more news:

Newborn babies need to be fed.

OhEssYouCowboys on March 29, 2013 at 2:56 PM

I’m glad that in the 2012 campaign the GOP was able to run a candidate who could oppose Obama relentlessly and effectively on Obamacare.

Oh, wait….

BuckeyeSam on March 29, 2013 at 2:59 PM

No one who understands risk pools and the economics that drive them will be surprised by this outcome. The problem is that no one who crafted this “reform” understood risk pools and the economics that drive them.

I have to disagree.
The Big Ins Co Dogs and lobby helped craft this legislation behind closed doors. AARP for example.. knew exactly the ramifications..
I now get emails pleading with me to call my congressmen because
Advantage Plans are in trouble. Uh huh..big surprise.
They are well aware of risk pools & actuarial assessments.
Average people without Ins knowledge called this out long ago.
It isn’t rocket science…common sense.

They had a goal and didn’t give a damn about the consequences as long as they achieve their American socialized medicine.
They will justify the damage to achieve their goal..

Spot on- it will be the middle class (young,old and in between)
and small business owners who will receive a beating.

bazil9 on March 29, 2013 at 3:00 PM

The problem is that no one who crafted this “reform” understood risk pools and the economics that drive them.

Even if they did know, they didn’t care. This isn’t about health insurance, it’s about power and control, the lifeblood of politics. As long as the Bloombergs, Emanuels, Cuomos, Obamas, and all of their ilk can infringe on our freedoms, they will continue to exercise more and more power and control given to them by low information voters who want to be taken care of by the Nanny State. Can’t wait for the lemmings to find out that their health care ain’t as “free” as they thought, especially when they have to wait five months to get a doctor’s appointment and they have to wait an additional four hours in the waiting room to get in to see him/her. It’ll just be a hoot!

College Prof on March 29, 2013 at 3:02 PM

Until bayam says premiums are going to increase, I don’t believe a word of this nonsense.

Washington Nearsider on March 29, 2013 at 3:02 PM

This isn’t what the Obama Campaign said was going to happen. I think I’ll reject these studies and stick with what Obama said because I like that better.

forest on March 29, 2013 at 3:02 PM

How come no one cared about the studies saying this before the rammed that stupid Bill down our throats?

Cindy Munford on March 29, 2013 at 2:52 PM

Funny that,eh Cindy?
Because they had to pass it to see what was in it,silly goose!
;)

bazil9 on March 29, 2013 at 3:06 PM

Death is too good an outcome for the bas tards that did this to us.

They poked the Wolverine with the sharp stick one too many times.

They are about to get their balls ripped off.

Wishfull thinking.

III/0317

dirtengineer on March 29, 2013 at 3:07 PM

I blame global warming and George Bush.

SirGawain on March 29, 2013 at 3:08 PM

College Prof on March 29, 2013 at 3:02 PM

I’m so cynical that I counting the days unitl Obamacare requires you to purchase health food. Receipts will have to filed with your taxes. Or when you have to attended “health care” classes if they don’t like your weight or something. Wait until they decrees on what they can teach in schools. As long as it’s a mandate and the mandate has an associated fine, it’s governance by mandate.

Oil Can on March 29, 2013 at 3:09 PM

1. DUH!

2. Immediately after Obamacare passed, Obama openly admitted that neither he nor Congress EVER had the power to lower the cost of health care, that they aways knew it would increase the cost of health care/coverage, but insisted that the intent was nevber to do anything about the COST but instead to ensure everyone has/had access to covergage/.

3. Anyone who actually needed a study to figure this out is a dumb@SS! Obama also claimed Obamacare would pay for itself & reduce the deficit…people also believed that B$! No study was needed to know that was cr@p, either.

easyt65 on March 29, 2013 at 3:10 PM

When I first read it, I thought this New York Times report from late last night was just late to the party.

I have the same problem whenever I read a headline about a study showing Obamacare raises costs and premiums. Is it a new one or the same one I read about two days ago? This type of confusion is probably helpful to Obama.

Mark1971 on March 29, 2013 at 3:11 PM

Libs are charged up
and everything is Ram and Rush.
By design.

HC,Guns,SSM,Amnesty,mother gia-on and on.
The consequences are no matter to them.

bazil9 on March 29, 2013 at 3:12 PM

Well, DUH!!!

ladyingray on March 29, 2013 at 3:13 PM

Healthcare 2.0
–bayam

tom daschle concerned on March 29, 2013 at 3:15 PM

When is the Republican party going to start shouting this from the mountain top?They need to spend some money and run ads on every network 24/7.All I see are ads for the Obamacare Survival Guide.They have lost on gays,illegals,and women.This should be the big winner for them.

docflash on March 29, 2013 at 3:16 PM

easyt65 on March 29, 2013 at 3:10 PM

Right-O
This was not about bringing down the cost of healthcare.
Healthcare costs are still soaring. gee wiz..wonder why.

Coverage does not = quality of care,treatment or affordability.
That to will be realized by those who still applaud this disaster.

bazil9 on March 29, 2013 at 3:19 PM

Meanwhile Planned Parenthood official now arguing for Post-Birth Abortion RIGHTS.

tom daschle concerned on March 29, 2013 at 3:21 PM

When is the Republican party going to start shouting this from the mountain top?They need to spend some money and run ads on every network 24/7.All I see are ads for the Obamacare Survival Guide.They have .This should be the big winner for them.

docflash on March 29, 2013 at 3:16 PM

lost on gays – not the hill to die on

illegals – not the hill to die on

women – not the hill to die on

This isn’t the hill to die on. Just ask some the commenters here on HA.

RickB on March 29, 2013 at 3:24 PM

A sign of decreasing healthcare costs is rising healthcare costs.

BobMbx on March 29, 2013 at 2:51 PM

Yes, it’ll be like global warming: unusually warm weather = proof of global warming. Unusually cool weather = proof of global warming. Unusually dry weather = proof of global warming. Unusually wet weather = proof of global warming. Unusually stormy weather = proof of global warming. Unusually calm weather = proof of global warming.

So the Dim hacks and the MSM (but I repeat myself) will tell us that higher insurance premiums = proof that Obamacare is awesome! Higher costs for all medical services and devices = proof that Obamacare is awesome! Fewer people with jobs = proof that Obamacare is awesome! Longer wait times for medical care = proof that Obamacare is awesome! Untold numbers of state and federal bureaucrats having access to your private medical information = proof that Obamacare is awesome! Fewer medical procedures covered by SS for seniors = proof that Obamacare is awesome! More medical device companies re-locating out of the U.S. = proof that Obamacare is awesome! Bigger deficits and higher taxes for everybody = proof that Obamacare is awesome! More Americans than ever forced to do without health insurance = proof that Obamacare is awesome!

AZCoyote on March 29, 2013 at 3:24 PM

Sex changes are covered.

Schadenfreude on March 29, 2013 at 3:29 PM

[Obamacare] will drive up individual insurance premiums, but that subsidies will offset most of the increase for low-income people.

Premiums could increase by an average of 30 percent for higher-income people in California who are now insured and do not qualify for federal insurance subsidies, the study said.

More of the rampant class warfare being waged by Obama’s mandates, his agencies, and Congress.

in_awe on March 29, 2013 at 3:33 PM

Sex changes are covered.

Schadenfreude on March 29, 2013 at 3:29 PM

Of course. And every foreign loon who can afford a bus ticket, a coyote, or a plane ticket will be coming here to get their “free” gender re-assignment surgeries, courtesy of U.S. taxpayers.

AZCoyote on March 29, 2013 at 3:36 PM

What difference, at this point, does it make?

Common Sense Floridian on March 29, 2013 at 3:39 PM

Can’t wait for the lemmings to find out that their health care ain’t as “free” as they thought, especially when they have to wait five months to get a doctor’s appointment and they have to wait an additional four hours in the waiting room to get in to see him/her. It’ll just be a hoot!

College Prof on March 29, 2013 at 3:02 PM

Did you see the report this week about the new “group appointment” protocol being touted in DC as a way to reduce costs and stretch available MD time farther? As I recall, it was suggested that up to 10 patients with similar maladies be “seen” at a time. So much for HIPPA, commonsense, privacy and personal care of the kind that Obama PROMISED – PROMISED I SAY – would be untouched under the Obamacare scheme.

in_awe on March 29, 2013 at 3:43 PM

Premiums could increase by an average of 30 percent for higher-income people in California who are now insured and do not qualify for federal insurance subsidies, the study said.

Yes, lower health insurance costs for those with pre-existing conditions, making healtchare affordable for those in the middle class with a chronic illness. How terrible!

Even if they did know, they didn’t care. This isn’t about health insurance, it’s about power and control, the lifeblood of politics.

In reality, health care reform has unleashed billion of dollars in venture capital investments to improve US healthcare. It’s funny how the great champions of capitalism don’t fully grasp what’s occurring today in the private sector.

bayam on March 29, 2013 at 3:43 PM

Just today I saw a bumper sticker that read “I love Obamacare” – on a campus naturally. They don’t have any idea what the actual results are going to be, yet they already love it. And even if the results are absolutely horrifying, this person, probably a professor, will still insist that it’s wonderful. True cultists.

forest on March 29, 2013 at 3:48 PM

If you consider the young are really just the 1% of health-wealth, it’s just about them paying their fair share, I guess.

lymond on March 29, 2013 at 3:50 PM

forest on March 29, 2013 at 3:48 PM

Uh huh..
Saw it on an old ladies car here the other day.
Shook my head..tools.

bazil9 on March 29, 2013 at 3:53 PM

Yes, lower health insurance vacation and RV costs for those with pre-existing conditions no marketable skills, making a life of leisure affordable for those in the middle class with a chronic illness the most lazy among us. How terrible!

Just change the shiny object as the subject and the argument is exposed as only a method to re-distribute wealth.

You are deeply into the socialist soup, aren’t you?

BobMbx on March 29, 2013 at 3:58 PM

bayam on March 29, 2013 at 3:43 PM

As usual you’re carrying Obama’s water. We were told something different now weren’t we.

No wipe O’s jizz off your lips. You’re an embarrassment.

CW on March 29, 2013 at 4:02 PM

In reality, health care reform has unleashed billion of dollars in venture capital investments to improve US healthcare. It’s funny how the great champions of capitalism don’t fully grasp what’s occurring today in the private sector.

bayam on March 29, 2013 at 3:43 PM

There is very little “private sector” about healthcare.

Of course, you know this. You reprobate Stalinist.

tom daschle concerned on March 29, 2013 at 4:06 PM

It’s funny how the great champions of capitalism don’t fully grasp what’s occurring today in the private sector.
 
bayam on March 29, 2013 at 3:43 PM

 
Well played.

rogerb on March 29, 2013 at 4:17 PM

In reality, health care reform has unleashed billion of dollars in venture capital investments to improve US healthcare. It’s funny how the great champions of capitalism don’t fully grasp what’s occurring today in the private sector.

bayam on March 29, 2013 at 3:43 PM

Just asserting something does not make it true. this is simply not true. There is no evidence of it.

Yes, lower health insurance costs for those with pre-existing conditions, making healtchare affordable for those in the middle class with a chronic illness. How terrible!

It was sold as reducing – or at least not changing – our costs. Are you now admitting that it was a wealth redistribution scheme as we claimed all along? How honest of you.

I guess no matter how bad Obamacare hurts the economy or drives up health care costs – which it is clearly doing – you think it was somehow “good” for everyone. We argued – correctly – that costs would go up and quality of care would go down. You and yours argued “nonsense, this will reduce costs and improve everything”. Once again, reality proves the left wrong, and your answer is to just keep lying.

but the way, it is not “insurance” when it is for someone with pre-existing conditions. You cannot “insure” something that already happened. In that case it is simply making someone else pay for an existing cost. It is the same as getting “insurance” after an car accident to cover the cost of that car accident.

How you people don’t understand simple ideas is striking.

Monkeytoe on March 29, 2013 at 4:20 PM

. It’s funny how the great champions of capitalism don’t fully grasp what’s occurring today in the private sector.

bayam on March 29, 2013 at 3:43 PM

Dimwit is too stupid to see the upcoming fleecing of America. This is more about cronyism than capitalism.

Oh AND YOUR SIDE lied about the costs. Eff You .

CW on March 29, 2013 at 4:20 PM

You and yours argued “nonsense, this will reduce costs and improve everything”. Once again, reality proves the left wrong, and your answer is to just keep lying.

Monkeytoe on March 29, 2013 at 4:20 PM

And once its all said and done, 30 million people will not have insurance.

More expensive, reduced services, and no change in the number insured. Sounds like status quo for a government program.

BobMbx on March 29, 2013 at 4:33 PM

Midas on March 29, 2013 at 2:46 PM

THIS. In unguarded moments many Dems have said that Obamacare is an incremental step toward single payer. I think it’s actually meant to fail. And then the government will step in and call for, guess what: more government!

TarheelBen on March 29, 2013 at 4:59 PM

If there is a hell, you can be sure Kathleen Sebelius will be there.

bw222 on March 29, 2013 at 5:11 PM

And once its all said and done, 30 million people will not have insurance.

BobMbx on March 29, 2013 at 4:33 PM

True, but Obama’s (and Eric Holder’s) people will have insurance and so will the illegal aliens after amnesty.

bw222 on March 29, 2013 at 5:13 PM

In reality, health care reform has unleashed billion of dollars in venture capital investments to improve US healthcare. It’s funny how the great champions of capitalism don’t fully grasp what’s occurring today in the private sector.

bayam on March 29, 2013 at 3:43 PM

If that’s the case, shouldn’t that billions of dollars in venture capital be creating all those jobs Nancy Pelosi talked about? I’m waiting… Okay, time’s up. What’s happening is that because of the uncertainty of the impacts of the law, companies are awash with cash that they are not willing to risk to create any jobs. Nice try, Sweetie.

College Prof on March 29, 2013 at 5:31 PM

Yes, lower health insurance costs for those with pre-existing conditions, making healtchare affordable for those in the middle class with a chronic illness. How terrible!

Uh, no. Insurance companies can still charge up these people up to 3x the lowest rates. Who are typically the lowest rates? The young and healthy, whose rates are going up.

In reality, health care reform has unleashed billion of dollars in venture capital investments to improve US healthcare. It’s funny how the great champions of capitalism don’t fully grasp what’s occurring today in the private sector.

bayam on March 29, 2013 at 3:43 PM

You said the same thing about electronic records. Rates go up in 9 months.

Chuck Schick on March 29, 2013 at 5:48 PM

A study commissioned by the State of California says that the new federal health care law will drive up individual insurance premiums, but that subsidies will offset most of the increase for low-income people.

Got that bayam, you disingenusous little goat? The subsidies DON’T EVEN COVER THE INCREASES DUE TO OBAMACARE.

Chuck Schick on March 29, 2013 at 5:54 PM

but that subsidies will offset most of the increase for low-income people.

Yeah – DEMOCRATIC ‘low-income’ VOTERS.

GarandFan on March 29, 2013 at 6:26 PM

In reality, health care reform has unleashed billion of dollars in venture capital investments to improve US healthcare.
bayam on March 29, 2013 at 3:43 PM

Do you have some example of this? Currently reimbursements are predicted to shrink year after year for providers and institutions, the only parties set to gain are insurers. I don’t know that investing in health insurance companies will improve healthcare.

Because the requirements for minimum health insurance are so much more extensive (sex change, anyone?) costs for people with chronic conditions won’t actually drop, so you really don’t have any valid points.

One of my big disappointments in this whole debacle was how easily much of the medical community rolled over for this bill. It was so easy to see how this would hurt the average American , but the ACP went for it hook,line and sinker.

talkingpoints on March 29, 2013 at 6:35 PM

In my version of reality, health care reform has unleashed billion of dollars in venture capital investments to improve US healthcare. It’s funny how the great champions of capitalism don’t fully grasp what’s occurring today in the private sector.

bayam on March 29, 2013 at 3:43 PM

Corrected.

Some examples of what you are claiming would be nice, but I’m guessing that since you vanished after your post here that you don’t have any.

F+

Del Dolemonte on March 29, 2013 at 6:48 PM

A study commissioned by the State of California says that the new federal health care law will drive up individual insurance premiums, but that subsidies will offset most of the increase for low-income people.

And most of those ‘low-income’ people will be the amnestied illegals if a immigration bill gets passed. That will drive the costs up even more, since the reports do not account for them in their analysis. You can easily add another 50% on top of anything they come up with since the majority of illegals ha e incomes at or near poverty.

The study, issued Thursday in the midst of a growing national debate over the impact of the law, is significant because California is far ahead of most states in setting up a competitive marketplace, or exchange, where people can buy insurance this fall.

Newsflash California – competitive marketplaces have already been set up in your state and others long ago. It is called the free market! You did not create that, nor did the federal government.

Patriot Vet on March 29, 2013 at 10:47 PM

…no one who crafted this “reform” understood risk pools and the economics that drive them.

Au contraire, mon ami! The real question is: When did the Dems recognize they could “tax” the middle class through increased premiums? And they get to say they provided universal health insurance without raising taxes on the Middle Class!

And there’s more! Proclaim that you’re slapping a big, fat tax on those dastardly isurance companies. Hooray! Snicker, snicker. Guess who ends up paying the bill. Ta da! The people who pay for their own insurance as well as for the free riders….aka the Middle Class.

Just one more example of how Obama penalizes those who take personal responsibility for themselves and rewards those who don’t work, don’t pay their bills, and don’t provide for their own insurance.

jeanneb on March 30, 2013 at 10:10 AM