Health care premiums could more than double for some Americans when the major provisions of President Obama’s health care law go into effect next year, according to a new report from Congressional Republicans.
The report, which is based on a compilation of studies on the effect of the law’s new regulations, finds that premiums could increase 40 percent on average, and by as high as 202 percent for young adults living in Chicago.
There are several ways in which the health care law puts upward pressure on premiums. It requires insurers to offer coverage to everybody who applies, regardless of preexisting conditions and limits the amount that companies can adjust prices based on health status. It also requires that every American purchase a health insurance policy that meets federal specifications regarding the level of benefits covered. In addition, the law imposes $165 billion of tax increases on health insurance, drug manufacturers and medical device makers. These policies work together to drive up the cost of insurance, especially on younger and healthier Americans.
It’s true that the law also offers subsidies to individuals to purchase insurance. But those subsidies get phased out for individuals earning more than $46,000. The report anticipates that, “Even after receiving subsidies, Americans earning as little as $25,000 will still pay more.”
According to the report, prepared by Republicans on the House Energy and Commerce Committee as well as Senate Finance and Health, Education, Labor & Pensions committee, 13 states could see premiums double in the individual market: Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kentucky, Missouri, Ohio, Oklahoma, Tennessee, Wisconsin and Wyoming.
Some states, such as New Jersey and Massachusetts, would experience lower increases under these estimates (around 39 percent), because they already have highly-regulated insurance markets with hefty premiums.