Tag: health insurance premiums

Obamacare Increases Man’s Premiums 300%, Supporters Call It a Success Story

Obamacare’s health insurance Exchanges opened for business, in most states, sort of, on Tuesday. Millions of people have reportedly flooded the Exchanges, but have had so much difficulty using the web sites that reporters have had a hard time finding anyone who has successfully enrolled in an Obamacare plan. The Washington Post’s Sarah Kliff writes:

Just moments after writing a blog post Thursday morning, about the lack of information on Obamacare enrollees, Enroll America reached out with contact information for Chad Henderson, a 21-year-old in Georgia who had successfully enrolled in coverage on the federal marketplace.

Chad is evidently a scarce commodity.

It was a little difficult to reach Henderson, mostly because so many other reporters wanted to talk to him. “I’m supposed to talk to the Chattanooga Times Free Press in a half hour,” Henderson said. “And The Wall Street Journal is supposed to call.”

Luckily, Henderson managed to squeeze me in for a few minutes.

Kliff reports that after a three-hour ordeal, Chad bought an Obamacare plan that cost him $175 per month – pretty steep, considering he makes less than $11,500 per year. His Obamacare premium comes to least 18 percent of his income. And no, Chad is not eligible for subsidies.

Compare that to what Chad could have paid if he bought one of the pre-Obamacare plans still available on eHealthInsurance.com until December 31. The cheapest such plan for someone meeting Chad’s profile is just $44.72 – as little as 5 percent of his annual income and about one-quarter of his Obamacare premium.

I can’t yet say whether Chad’s $175 premium is the lowest-cost plan available to him through the Exchange. (I’m in the process of researching that. Let’s just say it’ll probably take a few hours.) But it’s probably close. The cheapest plan available to him through eHealthInsurance.com after Obamacare’s community-rating price controls take effect in 2014, and drive up premiums for young, healthy people market-wide, is $190.23. That’s with the maximum cost-sharing allowed under Obamacare. So it appears Obamacare quadrupled Chad’s premiums, and Enroll America thinks that is a success story.

To me, the most interesting part is that Chad didn’t buy health insurance when it was available to him for just $45 per month, but did buy it at an unsubsidized $175/month premium. Why? Again, Kliff:

He describes himself as a supporter of President Obama who has anxiously awaited Obamacare’s rollout…

Part of his decision was ideological: He wants the health-care law to succeed.

California Officials Deliberately Mislead Public on Obamacare Rate Shock

Ever since Obamacare became law, I have been counseling states not to establish the law’s health insurance “exchanges,” in part because:

to create an Exchange is to create a taxpayer-funded lobbying group dedicated to fighting repeal. An Exchange’s employees would owe their power and their paychecks to this law. Naturally, they would aid the fight to preserve the law.

California was the first state both to reject my advice and to prove my point.

Officials operating California’s exchange–which the marketing gurus dubbed “Covered California“–recently and deliberately misled the entire nation about the cost of health insurance under Obamacare.

They claimed that health plans offered through Covered California in 2014 will cost the same or less than health insurance costs today. “The rates submitted to Covered California for the 2014 individual market,” they wrote, “ranged from two percent above to 29 percent below the 2013 average premium for small employer plans in California’s most populous regions.”

See? No rate shock. California’s top Obamacare bureaucrat, Peter Lee, declared his agency had hit “a home run for consumers.” Awesome!

Unfortunately, anyone who knows anything about health insurance or Obamacare knew instantly that this claim was bogus, for three reasons.

  1. Obamacare or no Obamacare, health insurance premiums rise from year to year, and almost always by more than 2 percent. So right off the bat, the fact that Covered California claimed that premiums would generally fall means they’re hiding something. 
  2. Obamacare’s requirement that insurers cover all “essential health benefits” will force most people who purchase coverage on the “individual” market (read: directly from health insurance companies) to purchase more coverage than they purchase today. This will increase premiums for most everyone in that market.
  3. Obamacare’s community-rating price controls (also known as its “pre-existing conditions” provisions) will increase premiums for some consumers (i.e., the healthy) and reduce premiums for others (i.e., the sick). So it is misleading for Covered California to focus on averages because averages can hide some pretty drastic premium increases and decreases.

WSJ: ‘Roofer Union Calls for Repeal of Obama Health Law’

Take it, Janet Adamy:

A labor union representing roofers is reversing course and calling for repeal of the federal health law, citing concerns the law will raise its cost for insuring members.

Organized labor was instrumental in getting the Affordable Care Act passed in 2010, but more recently has voiced concerns that the law could lead members to lose their existing health plans. The United Union of Roofers, Waterproofers and Allied Workers is believed to be the first union to initially support the law and later call for its repeal.

“After the law was passed, I had great hope…that maybe the rough spots would be worked out and we’d have a great law,” said Kinsey Robinson, international president of the union, which represents 22,000 commercial and industrial roofers…

Mr. Robinson says the union’s concerns about the law began to pile up in recent months after speaking with employers.

The roofers’ union’s current insurance plan caps lifetime medical bill payouts at $2 million for active members and $50,000 for retirees. Next year, the plan has to remove those caps in order to comply with the health law. Other aspects of the retiree plan must become more generous in order to meet the law’s minimum essential coverage requirements next year. All that will increase the cost of insuring members, Mr. Robinson said, and has prompted the union to weigh eliminating the retiree plan.

Adding to those cost concerns is a new $63-per-enrollee fee on health plans that pays insurers to cover people with pre-existing conditions next year. Looking ahead to 2018, when the law levies an excise tax on high-value insurance plans, Mr. Robinson predicts that at least some of the union’s plans will get hit by it…

Over time, Mr. Robinson says, his optimism that regulators or lawmakers would address the union’s concerns diminished. “I don’t think they are going to get fixed,” he said. On Tuesday, the union called for a repeal of the health law or a complete reform of it.

Will the last ObamaCare supporter please turn off the lights?

If ObamaCare Isn’t Vulnerable, Why Is the President Violating the Law to Save It?

From my oped in today’s Daily Caller, heralding the release of my new Cato white paper, “50 Vetoes: How States Can Stop the Obama Health Law”:

But the surest sign that Obamacare remains vulnerable is that the Obama administration is violating its own statute, congressional intent, and even a Supreme Court ruling in order to save the law.

In “50 Vetoes,” a study released today by the Cato Institute, I explain the administration is so afraid of a sticker-shock fueled backlash that it is preparing to spend more than $600 billion that Congress never authorized to numb consumers to the costs of this law. Along the way, the administration will impose roughly $100 billion in illegal taxes on employers and individuals (including some legal immigrants below the poverty level), and deny millions of individuals the right to purchase low-cost “catastrophic plans.”

To cement the law’s Medicaid expansion in place, the administration is also violating the Supreme Court’s ruling in NFIB v. Sebelius. The Court prohibited the federal government from coercing states into implementing the expansion. Yet HHS is still threatening every state with the loss of all federal Medicaid funds if they fail to implement parts of the expansion. These are not the actions of an administration that feels its health care law is secure.

Finally, supporters forget that President Obama and congressional Republicans have already repealed important parts of the law, including Obamacare’s third entitlement program — a long-term care program known as the CLASS Act, repealed as part of the “fiscal cliff” deal. President Obama is already repealing his law one provision at a time.

Obamacare supporters may scoff at repeal. But if vulnerable Democratic senators start hearing from their constituents about the chaos and sticker shock they experience later this year, the scoffing will cease.

Read the whole paper.

50 Vetoes: How States Can Stop the Obama Health Care Law

Today, the Cato Institute releases my latest working paper, “50 Vetoes: How States Can Stop the Obama Health Care Law.” From the executive summary:

Despite surviving a number of threats, President Obama’s health care law remains harmful, unstable, and unpopular. It also remains vulnerable to repeal, largely because Congress and the Supreme Court have granted each state the power to veto major provisions of the law before they take effect in 2014.

The Patient Protection and Affordable Care Act (PPACA) itself empowers states to block the employer mandate, to exempt many of their low- and middle-income taxpayers from the individual mandate, and to reduce federal deficit spending, simply by not establishing a health insurance “exchange.” Supporters of the law do not care for this feature, yet they adopted it because they had no choice. The bill would not have become law without it.

To date, 34 states, accounting for roughly two-thirds of the U.S. population, have refused to create Exchanges. Under the statute, this shields employers in those states from a $2,000 per worker tax that will apply in states that are creating Exchanges (e.g., California, Colorado, New York). Those 34 states have exempted at least 8 million residents from taxes as high as $2,085 on families of four earning as little as $24,000. They have also reduced federal deficits by hundreds of billions of dollars.

The Obama administration is nevertheless attempting to tax those employers and individuals, contrary to the plain language of the PPACA and congressional intent, and to deny millions of Americans the opportunity to purchase low-cost, high-deductible coverage. Employers, consumers, and even state officials in those 34 states can challenge those illegal taxes in court, as Oklahoma has done. States can also block those illegal taxes—and even stop the federal government from operating an Exchange—by approving a strengthened version of the Health Care Freedom Act.

The PPACA’s Medicaid expansion, which would cost individual states up to $53 billion over its first 10 years, is now optional for states, thanks to the Supreme Court’s ruling in NFIB v. Sebelius. Some 16 states have announced they will not expand their programs, while half of the states remain undecided. Yet the Obama administration is trying to coerce states into implementing parts of the expansion that the Court rendered optional. States can replicate Maine’s lawsuit challenging this arbitrary attempt to limit the Court’s ruling.

Collectively, states can shield all employers and at least 12 million taxpayers from the law’s new taxes, and still reduce federal deficits by $1.7 trillion, simply by refusing to establish Exchanges or expand Medicaid.

Congress and President Obama have already repealed the third new entitlement program the PPACA created—the Community Living Assistance Services and Supports Act, or CLASS Act—as well as funding for the “co-op” plans meant to serve as an alternative to a “public option.” A critical mass of states exercising their vetoes over Exchanges and the Medicaid expansion can force Congress to reconsider, and hopefully repeal, the rest of this counterproductive law. Real health care reform is impossible until that happens.

California Officials: ObamaCare ‘Exchange’ Will Hike Premiums up to 25%

California is one of the few states charging ahead on establishing one of ObamaCare’s health insurance “exchanges.” According to the Los Angeles Times:

California insurance officials have expressed concern about substantial rate hikes for some existing policyholders going into the exchange.

Under a new rating map approved by state lawmakers, the Department of lnsurance estimated that premiums for similar coverage could increase as much as 25% in West Los Angeles, 22% in the Sacramento area and nearly 13% in Orange County.

California officials have floated the idea of legislating lower prices. One way would be to throw West Los Angeles and Orange County into the same risk pools. That might reduce premiums in West L.A., but only by increasing premiums in Orange County. With a few simplifying assumptions, premiums in both  West L.A. and the O.C. could rise by 19 percent. An alternative would be to cap premium increases. One state official proposes a cap of 8 percent. But that would just be an implicit form of government rationing. If insurers cannot charge premiums that cover their costs, they will cover fewer services.

If Oklahoma prevails in its lawsuit against the IRS, or if any similar plaintiffs prevail, California will look pretty silly for charging forward with an Exchange. California will have imposed on its employers an unnecessary tax of $2,000 per worker – a tax that California employers can avoid by relocating to states that have not created an Exchange. It will also have unnecessarily exposed 2.6 million California residents to ObamaCare’s individual mandate – i.e., a tax of $2,085 on families of four earning as little as $24,000 per year, which those residents can likewise avoid by relocating to another state.

Watch this space for development.

States Should Flatly Refuse to Create ObamaCare Exchanges (New Cato Video)

This new Cato Institute video explains why it is in no state’s interest to create an ObamaCare Exchange.

Many thanks to Cato’s very talented Caleb O. Brown and Austin Bragg.

For the more-words-no-pictures version, click here or here. For a word about ObamaCare profiteers the pro-Exchange lobby, click here. Click here to read about what is happening in the states.

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