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Obamacare could double or triple health insurance rates

Teresa Tanoos's picture
Obamacare may double or triple health insurance rates

The Affordable Care Act (a.k.a. Obamacare) is supposed to make health care available to all Americans, but insurance rates for those in good health may double or even triple, while premiums paid by sicker people will likely decrease, according to a Wall Street Journal report.

Under Obamacare, individuals can look for health insurance on the law’s new exchanges later this year. However, an analysis of coverage to be sold on the exchanges suggests that these marketplaces will offer few if any of the cut-rate policies that healthy people can currently purchase.

For example, a 40-year-old single nonsmoker, in the middle of the age range eligible for exchanges, could take a "bronze" insurance plan that covers about 60% of medical costs for around $200 per month in most states.

However, healthy 40-year-olds can typically get coverage for far less today, especially if they’re willing to accept fewer benefits or take on more costs themselves. Such individuals could, for instance, find a premium that covers half of all medical costs for only $63 per month under a WellPoint plan offered in Virginia via Anthem.

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"If a person in 2013 has a choice of buying a Chevrolet or a Cadillac health plan and in 2014 they can only buy a Cadillac, are they going to be upset? I think the answer is yes," Bob Laszewski, a Virginia health care consultant, told the WSJ.

Needless to say, healthy 40-year-olds aren’t the only ones who will be buying insurance on health exchanges, and costs will vary from state to state. For example, the lowest priced plan offered on an exchange in Nashville, Tenn., is $149 per month, which is 23 percent less than the $193 monthly premium offered on an exchange in Richmond, Virginia.

Regardless, the majority of Americans report that they are not happy with President Obama’s healthcare law, nor are they happy with the exchanges that are at the heart of it. Indeed, in a recent survey from CNN/ORC International, 54 percent of Americans reported that they oppose Obamacare.

Meanwhile, supporters of the federal law claim that tighter regulation on health insurance will provide Americans with more protection, making it worth the additional cost. However, that’s not what then-Senator Obama promised when he said premiums would go down under his plan by $2,500 per family per year. The other challenge is the fact that not every American has an immediate need for medical care.

If only sick people buy into the new insurance pools, costs could soar.

SOURCE: 1. The Wall Street Journal, “Insurance Costs Set for a Jolt”, Louise Radnofskey (July 1, 2013). 2. U.S. Department of Health & Human Services, HealthCare.gov