A new study released Wednesday by HealthPocket shows a startling increase in health premiums before and after the Affordable Care Act (also known as Obamacare). The largest increases were for younger men and could be devastating for those people who are on the exchanges but without government subsidy assistance.
HealthPocket found that men suffered the biggest price increases. Premiums for 23-year-old males rose 78.2 percent, for 30-year-old males 73.4 percent, and for 63-year-old males 22.7 percent.
For women, premiums for 23-year-olds rose 44.9 percent, for 30-year-olds 35.1 percent, and for 63-year-olds 37.5 percent. It’s important to remember that before Obamacare, insurers often discriminated against women enrollees, charging them much higher rates.
HealthPocket, a health plan comparison and research site, conducted the study based on three age groups, 23, 30 and 63 year-olds using premium data from pre-Obamacare private insurance in 2013 and Obamacare exchanges in 2014 in metropolitan areas in every U.S. state.
The rate increases don’t factor in Obamacare subsidies, which redistribute the costs of the higher health insurance to the government.
The Obamacare subsidies are meant to pay a percentage of the health insurance premiums for people making annually between 100 percent to 400 percent of the federal poverty level (which is $11,670 to $46,680 a year for 2014). Although, HealthPocket found in a separate study that technicalities in the Obamacare law prevented many people making above $30,000 to cash in.
The authors of the study admit to two limitations.
First of all, before the reform law, some applicants were rejected for health insurance. The authors can’t compare a price with not being able to get insurance at all. Naturally, since insurance companies can no longer discriminate based on preexisting conditions or factors such as smoking, the cost of those higher risk people is likely distributed into the current pool of insurance buyers, contributing to the rise.
Second, Obamacare eliminated a common practice in the insurance business, rate-ups, where companies would give an initial quote that would later increase in the application process. HealthPocket could only use data on premiums before rate-ups, so those extra costs are not accounted for.
HealthPocket’s research shows that there are certainly some Americans suffering quite a bit from Obamacare, young people who don’t qualify for subsidies for one reason or another, especially men.
Still, the data is not nearly enough to judge the success or failure of the Affordable Care Act.
According to the New York Times, about 85 percent of new enrollees did qualify for subsidies and on average the Obamacare subsidies covered 76 percent of the cost of the insurance. Those subsidies more than cover the enormous premium increase since Congress passed the reform.
Likewise, the percentage of uninsured people has dropped 25 percent, theoretically reducing overall medical costs by eliminating unpaid emergency room visits. And on top of all that, the health insurance industry is reportedly flourishing under the new reform laws.
With so many variables in health care and insurance, determining the success of the Obamacare legislation will come down to individual satisfaction, and it is probably impossible to please everyone.
[Image Credit: Pete Souza/Wikimedia Commons]