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HealthPocket on 2014 Exchange Premiums

By November 3, 2014Commentary

Everyone is so eager to politicize the effects of the health reform law that it is hard to find trustworthy information.  Certainly everything the Administration puts out is skewed and misleading.  A report from HealthPocket uses actual quotes on the exchanges to ascertain how much more enrollees of age 23, 30 and 63, men and women, paid under reform than in the prior individual market.  (HP Report)   For every age and sex combination premiums were higher; in all cases at least 23% greater and in some cases 70% more.  Young men had the largest increase, partly because their premiums before reform were the lowest; and senior men had the lowest increase, partly because their premiums were the highest pre-reform.  New York had the highest average premiums of all states for 23 and 30 year-olds and Virginia did  for 63 year-olds.  Hawaii had the lowest premiums for the younger groups and Vermont did for those aged 63.

It is hard to tell what the actual impact of the increases was, partly because these don’t appear to be weighted averages, that is, take the number of people actually paying a certain premium and average across those.  Also, before reform, roughly 20% of applicants for individual insurance may have been rejected.  The fact that they cannot be excluded now is good for them but drives every else’s rates up to pay these individuals’ higher costs.  Not sure how “fair” that is.  Also, a number of enrollees were likely eligible for the subsidy for low-income people, so their effective cost would be lower, but again, that doesn’t help everybody else with a higher premium, most of whom also get to pay higher taxes to generate the subsidy.  Most importantly, those who did get coverage were usually getting worse benefits–they had higher service copays and deductibles.  Health insurance in the individual market is costing substantially more, that is a fact and is contrary to what the Administration represented would happen.  And in 2015, the reality when all is said and done is that there will be another significant jump in premiums.

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