If health insurance prices triple, do we still have to call Obamacare the “Affordable Care Act”?
A report released yesterday by the House Committee on Energy and Commerce reveals the devastating reality many Americans will face when Obamacare is in full force next year. While the majority of Americans will likely see their healthcare premiums increase, no one will swallow the cost burden more than young Americans.
Previous studies have reported that youth healthcare premiums could increase as much as 45 percent, but the the House Committee report concluded that young Americans could see an increase as much as 203 percent.
“Recent college graduates with entry-level jobs who are struggling to pay off student loan debt could see their premiums increase on average between 145 and 189 percent,” the report said. “Some studies estimate young adults could experience premium increases as high as 203 percent. Any increase, let alone tripling current costs, could break the bank for young adults who have just started out on their own.”
The current average payment for health care premiums among young Americans is $648, but will increase to $1,872 under the Obamacare legislation. The graph below breaks down the average increases in healthcare premiums for young Americans in major cities:
According to the report, young Americans are disproportionately affected by Obamacare for three reasons:
- Guaranteed Issue and Community Rating: In other words, price controls. Obamacare mandates that all Americans pay healthcare premiums regardless of anticipated medical expenses. Young Americans must subsidize retirees who use healthcare far more often to level the insurance price disparity between younger and older Americans.
- Essential Health Benefits: Obamacare mandates certain health servives be covered by health insurance. These include coverage for preventive and wellness services, chronic disease management, rehabilitative and habilitative services, and many more. In short, the more categories you are forced to cover, the more expensive your premium will be. No more affordable catastrophic plans.
- Taxes and Fees on Plans, Drugs, and Medical Devices: The total cost of new taxes and fees on drug manufacturers, device manufacturers, and health care plans is $165 billion. This will ultimately be passed on to the consumer in higher premiums.
Families will also see a significant increase in their healthcare premiums. One of the studies in the report found that a family could see the costs of their premiums rise to $7,186 in the next decade.
With a stagnant economy, unprecedented levels of unemployment (youth unemployment currently 17.6 percent), and average household expenses on the rise (gas, food, energy, etc), there are very few people that can afford $800-$4,000 more to pay for the rise in healthcare premiums.
Remember when President Obama said, “if you like your healthcare plan, you can keep your healthcare plan”? Or that Obamacare would “bring down premiums by $2,500 for the typical family.” Me too.