Obamacare in Ohio

Ohio Shows ObamaCare Is Working As Intended

Posted 06/11/2013 06:58 PM ET

Health Care Reform: President Obama went to California last week to declare ObamaCare is working just as planned. If he means it was intended to dramatically hike insurance costs, he's got that right.

As ObamaCare's launch date draws closer, a picture is emerging as to how it will affect insurance premiums. And that is increasingly one of sky-high premiums resulting from the law's market regulations, benefit mandates, taxes and fees.

Late last week, Ohio's Department of Insurance revealed that, thanks to ObamaCare, the average premium in that state's individual market will be 88% higher next year, and there won't be as many offerings.

"Consumers will have fewer choices and pay much higher premiums for their health insurance starting in 2014," said Lt. Gov. Mary Taylor.

In May, Rhode Island's biggest insurer, Blue Cross Blue Shield, proposed an 18% increase for individual plans, and almost 15% for small group plans. Other insurers operating in the state plan similar rate hikes.

That's the average. Blue Cross says a 28-year-old male Rhode Islander who makes $34,000 will see his premiums more than double to $244 a month next year.

Maryland's biggest insurer — CareFirst BlueCross BlueShield — filed for rates for individual plans that are 25% higher, on average, than those available today. Aetna told Kaiser Health News it expects premiums for Maryland small group plans to climb as much as 16%.

And California's recent claim that rates won't go up as a result of ObamaCare is based on a phony apples-to-oranges comparison between current small-business rates and next year's proposed rates for ObamaCare-approved individual plans. A more direct comparison finds a big jump in premiums in the individual market.

Many Oregonians, too, will likely get hit with significant premium hikes, despite claims that proposed ObamaCare rates in that state are comparable to this year's. When Hoover Institution senior fellow Daniel Kessler compared Kaiser Permanente rates for similar insurance plans available to a 25-year-old male, he found a premium spike of 78% next year.
Obama is right, however, that the law is "working the way it's supposed to." Fact is, these rate hikes aren't a bug in ObamaCare; they're a central feature.

The law forces insurers to provide more generous benefits than most do today. It limits co-payments and deductibles, bans lifetime limits, guarantees coverage no matter what, and requires the young and healthy to subsidize the old and sick.

The idea that you can do all this without raising insurance costs defies common sense and fundamental economic principles.

But ObamaCare also adds various taxes and fees that everyone knows will raise premium costs. Among other things, it imposes a $100 billion tax on health insurance providers that will simply get passed on to individuals and small businesses in the form of higher premiums.

Then there's the 3.5% fee the government plans to impose on insurers selling in federally run exchanges and the $20 billion hit to medical device makers that will end up coming out of consumers' pockets.
ObamaCare backers say that even if premiums go up overall, it's no big deal, since some will get subsidized coverage, either through market regulations or tax credits. And, they argue, the millions still forced to pay more for ObamaCare-approved insurance can take comfort in the knowledge that they're getting more generous insurance coverage.

But that's like forcing a Chevy customer to buy a fully loaded Cadillac and telling him he's better off because he's driving a government-approved Cadillac. Maybe liberal elites in Washington see this as a good financial trade-off. It's unlikely many families out in the real world will.