NCPA - National Center for Policy Analysis


October 30, 2009

How will ObamaCare affect insurance premiums in the private health care markets?  Despite indignant Democratic denials, the near-certainty is that their plan will cause costs to rise across the board, says the Wall Street Journal. 

The latest data comes from the insurance company WellPoint Inc., which mined its own actuarial data to model ObamaCare in the 14 states where it runs Blue Cross plans.  The study therefore takes into account market and demographic differences that other industry studies have not, such as the one from the trade group America's Health Insurance Plans, which looked at aggregate national trends:

  • In all of the 14 states WellPoint scrutinized, ObamaCare would drive up premiums for the small businesses and individuals who are most of WellPoint's customers (other big insurers, like Aetna, focus on the market among large businesses).
  • Young and healthy consumers will see the largest increases -- their premiums would more than triple in some states -- though average middle-class buyers will pay more too.

What distinguishes the Wellpoint study is its detailed rigor, says the Journal:

  • Take Ohio, where a young, healthy 25-year-old living in Columbus can purchase insurance from WellPoint today for about $52 per month in the individual market.
  • WellPoint's actuaries calculate the bill will rise to $79 because Democrats are going to require it to issue policies to anyone who applies, even if they've waited until they're sick to buy insurance.
  • They'll also require the company to charge everyone nearly the same rate, bringing the premium to $134.
  • Add in an extra $17, since Democrats will require higher benefit levels, and a share of the new health industry taxes ($6), and monthly premiums have risen to $157, a 199 percent boost.
  • Meanwhile, a 40-year-old husband and wife with two kids would see their premiums jump by 122 percent -- to $737 from $332 -- while a small business with eight employees in Franklin County would see premiums climb by 86 percent.

The story is largely the same from state to state, though the increases are smaller in the few states that have already adopted the same mandates and regulations that Democrats want to impose on all states, says the Journal.

Source: Editorial, "The WellPoint Revelation," Wall Street Journal, October 29, 2009.

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