NEWS: The Washington Examiner Reports Government Watchdog Details Current Health Insurance Costs as #RateShock Looms
A message you will not hear from the health care law’s nearly $700 million advertising campaign: premiums are about to get a lot more expensive, especially for young and healthy Americans. A new Government Accountability Office (GAO) report outlines the current cost of insurance premiums, providing an excellent benchmark to compare future Obamacare premiums. Earlier this year, the House Energy and Commerce Committee released a Rate Shock Report which, using data from 17 of the nation’s largest health insurance companies, found that premiums will increase by as much as 400 percent beginning next year.
July 24, 2013
GAO report points to Obamacare ‘rate shock’
A new report from the Government Accountability Office detailing insurance premiums paid throughout the United States in 2013 provides another piece of evidence that young and healthy Americans will see their premiums soar once President Obama’s health care law kicks in next year.
In response to a request from Sen. Orrin Hatch, R-Utah, the GAO cataloged premiums in all 50 states plus the District of Columbia as of January 2013. The report provides the minimum price, median price and maximum price for individual insurance policies for a sample of demographics. There are a number of caveats. The rates presented could vary based on a person’s specific health status, for instance, and not every plan was offered in every part of each state. But taken together, the report provides analysts with a good basic sense of where premiums are in the pre-Obamacare marketplace.
In the table below, I consolidated GAO data for the minimum annual price of insurance in every state for a 30 year-old male non-smoker. Obamacare hinges on convincing this population to purchase insurance.
There are several observations I have from looking at the data below. For starters, the four most expensive states for a young and healthy resident to purchase insurance (Massachusetts, New York, New Jersey and Maine) all currently have Obamacare-like regulations on the books (most significantly, a requirement that insurers cover those with pre-existing conditions). Massachusetts — the most expensive place to purchase insurance — is essentially Obamacare at the state level.
Beyond that, it’s worth noting that the anticipated rates under Obamacare are far more expensive than the existing rates for a healthy 30 year-old. Starting next year, a 30 year-old earning $35,000 per year would have to pay $2,739 annually for a cheap “bronze plan” on the new health insurance exchanges, even after receiving subsidies, according to the Kaiser Family Foundation’s subsidy calculator. That’s more expensive than any state in the current system, and seven times more expensive than in the cheapest state, Nebraska, where premiums are currently as low as $349 annually.
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