A new study from the Society of Actuaries predicts that individuals and families who already buy their own health insurance plans will face huge premium hikes when the exchanges created by the Patient Protection and Affordable Care Act open for business later this year. Rising claims from the pent-up demand of the newly insured, coupled with new mandates on what the policies must include, will lead to double-digit premium hikes in at least 43 states.
The study backs claims by the nation's health insurers that the increase in the exchange plans could be as high as 30% more than existing plans. Their preferred solution: Roll back the small tax on everyone's insurance premiums, which is slated to raise about $100 billion over the next decade to subsidize the insurance purchases of people earning less than 400% of the poverty level; eliminate some of the 10 essential health benefits that must be included on every insurance plan sold on the exchanges; and increase the allowable ratio that older people pay compared to younger people to 5:1 from 3:1.
What's going on here? Is the word affordable in the law's title a misnomer?
It's important to underscore that the higher premiums apply only to people who already purchase plans in the individual insurance market. That's fewer than 15 million people out of the 160 million or so who have private health insurance. Their ranks are slated to double if reform succeeds in getting the uninsured to buy policies.