By Chuck Norton
This is what happens when you add 21 new taxes to healthcare and insurance, 20,000 pages of new regulations (so far) and hundreds of new mandates on insurance, many of which make no sense.
The IRS estimates that the cheapest Obamacare approved health plan available in 2016 (to avoid the penalty) will cost $20,000.
In bold face below is the administration’s response to this study and what they say is just plain dishonest. Why?
The Obama Administration is trying to confuse people on cost vs price. A small percentage of Americans will have their skyrocketing health insurance premiums partially subsidized by the government, but while that may bring down the price of the premium, the actual cost of the premiums and the rising cost of the claims due to the taxes and regulations still skyrockets.
In this case price does not equal cost. For example: If your son goes to the store to buy a Hot Wheels car that costs $3.00 and your son only has $2.00, if you give him the extra dollar to pay for it, the cost of the toy car is still $3.00.
The idea of the subsidy making insurance affordable is also misleading because those who will be able to qualify to get help paying their premiums, will still not be able to afford their portion of the insurance premium because the cost of the insurance will be so high – subsidized or not.
This very writer’s employer subsidized health insurance premium went from about $30.00 a month to $267.00 and I make too much money to qualify for a subsidy. The poor simply cannot afford to pay it.
The other misleading statement from the Obama Administration is that some people can go on the state insurance exchange and get the state exchange to pay for part of their insurance premium. Setting aside the cost does not equal price fact we explained above, many states are not participating in the exchange. Why? Because after the first three years of Obamacare the states have to pay the subsidized portion of the rising premiums themselves which state after state has made very clear will bankrupt them (assuming that the poor would have the money to sign up and pay for their part of the estimated $20,000 per year premium).
Medical claims costs — the biggest driver of health insurance premiums — will jump an average 32 percent for Americans’ individual policies under President Obama’s overhaul, according to a study by the nation’s leading group of financial risk analysts.
The report could turn into a big headache for the Obama administration at a time when many parts of the country remain skeptical about the Affordable Care Act. The estimates were recently released by the Society of Actuaries to its members.
While some states will see medical claims costs per person decline, the report concluded the overwhelming majority will see double-digit increases in their individual health insurance markets, where people purchase coverage directly from insurers.
The disparities are striking. By 2017, the estimated increase would be 62 percent for California, about 80 percent for Ohio, more than 20 percent for Florida and 67 percent for Maryland. Much of the reason for the higher claims costs is that sicker people are expected to join the pool, the report said.
The report did not make similar estimates for employer plans, the mainstay for workers and their families. That’s because the primary impact of Obama’s law is on people who don’t have coverage through their jobs.
The administration questions the design of the study, saying it focused only on one piece of the puzzle and ignored cost relief strategies in the law such as tax credits to help people afford premiums and special payments to insurers who attract an outsize share of the sick. The study also doesn’t take into account the potential price-cutting effect of competition in new state insurance markets that will go live on Oct. 1, administration officials said.
“It’s misleading to look at only some of the provisions of the law because, taken together, the law will reduce costs,” said Health and Human Services spokeswoman Erin Shields Britt.
But a prominent national expert, recently retired Medicare chief actuary Rick Foster, said the report does “a credible job” of estimating potential enrollment and costs under the law, “without trying to tilt the answers in any particular direction.”