Morgan Patullo, ’15
This week many articles were published discussing the ways in which the Affordable Care Act will affect insurance premiums. Many predict varying effects for people of different gender, age, and location, as well as other factors.
Sarah Kliff reported in The Washington Post that Health and Human Services Secretary Kathleen Sebelius told reporters that women will see some lower costs and men will see some higher costs. Sebelius also said that older customers may see a small decline whereas younger customers will see a slight increase in the cost of their healthcare. These predictions are supported by Jim Meyers of Newsmax who reports that “The Affordable Care Act will have an especially harsh impact on young Americans ages 21-29 – those with individual coverage will see their healthcare premium rise by an average of 189 percent.”
Anna Wilde Matthews and Louise Radnofsky wrote in The Wall Street Journal that UnitedHealth Group Inc. told brokers that premiums for some customers buying their own plans may increase by up to 116%. For small businesses, rates may increase between 25% and 50%. However, it was also reported that these numbers represent the highest level to which premiums would likely rise. They do not represent an average, and there are even some situations in which customers may see decreases.
In another view on who will be affected, David Hogberg suggests that the premiums will vary by states. He reports in Amy Ridenour’s National Center Blog that New York, Rhode Island, Massachusetts, Vermont and New Jersey will likely see decreases in insurance premiums whereas the other 45 states and D.C. will see increases. Ohio and Wisconsin are predicted to see the largest premium increases, of a minimum of 80%. These results were predicted by the Society of Actuaries.
The factors taken into consideration when making these predictions are influenced by more than just the Affordable Care Act. Sarah Kliff reported that the consulting firm Milliman is expecting a 9% increase in their premiums simply due to the increased cost of health care. This may be true, but the Affordable Care Act’s reforms will also likely play an impact. Jim Meyers writes that because the reform mandates that everyone pay the same premiums no mater what their predicted medical expenses will be, this will increase premium costs for those under 50. The Affordable Care Act requires that when individuals purchase insurance, the insurance must include preventative services, chronic disease management and rehabilitative services, so people have less choice in the design of their health care plan which will also increase their premiums.
These increased premium predictions are extremely aggravating to many Americans because the Affordable Care Act was signed to make health care more affordable and reliable. I believe that much of the reason for the rise in insurance premiums is a combination of the Affordable Care Act and the increasing cost of health care. Because these insurance companies are required to provide more preventative care and will be unable to “decide” what is covered and what is not – in the past when someone developed cancer or other such health problems that required expensive care, the insurance companies might say that they did not cover those expenses, causing those that were sick to have to pay for their treatments from their own pockets – they will have to cover more costs. Insurance companies will now have to cover about 30 million more Americans, which will also increase their costs. How much these factors are increasing insurance companies’ costs is the real question. Once this is answered it will be much clearer whether insurance companies actually need to increase their premiums to provide the necessary health care for those they are insuring, or if they are only increasing them and using the Affordable Care Act as an excuse.