With just days to go before the Obamacare exchanges open, the Department of Health and Human Services finally addressed the question of health insurance premiums under the Affordable Care Act. HHS triumphantly declared that premium costs will be 16 percent less than projected, a victory for Americans everywhere!
Well, not exactly. If you follow a trail of footnotes, you will find that HHS is comparing their own findings to an old CBO projection for 2016 premiums. HHS is not saying that premiums will be 16 percent lower under the exchanges than they are now—although it certainly sounds like they are. They’re saying that HHS’s current premium estimation is 16 percent less than what the CBO projected premiums hypothetically could be in 2016. Who cares? Not only is the HHS report misleading, but it makes no mention of how much premiums will change between now and when the exchanges open.
Premium data information is only fully reported for 13 states and the District of Columbia, all of which set up their own exchanges. In these blue states, only 5 are expected to have premium decreases. Some of these overregulated states already imposed guaranteed issue and community rating before Obamacare, which drove healthy people out of the market and increased premiums. But once the individual mandate goes into effect, healthy people in these states will be forced back into the insurance market as subsidizers, reducing overall premium costs. Even with these subsidized decreases, the thirteen states and D.C. are still expected to see an average 24 percent increase in premiums.
And even worse, based on new data released by the HHS, average individual-market premiums nationwide are expected to increase up to 99 percent for men and 62 percent for women. Men, who typically use less healthcare services than women and therefore paid lower rates, will now be paying the same rates as their female counterparts under Obamacare, accounting for the disproportionate rate spikes. Critics say that the higher premiums will be offset by Obamacare’s subsidies. But only lower income individuals qualify for subsidies, and many times they’re not even enough to cover the increase in premium.
“For millions of Americans these new options will finally make health insurance work within their budgets,” HHS Secretary Sebelius said. What she is ignoring is that millions of other Americans will be footing the bill, being forced to pay higher premiums and higher taxes to fund the subsidies that they will never themselves receive.