Economics, Entitlements

Study: Obama healthcare reform raising costs, forcing workers out of existing plans

 

The Willis Report of Employers is out and it has some major implications for Obamacare:

– Employers report that their healthcare costs have increased by about 2-5%—mainly due to new mandates in the new health law such as requirements that young adults can continue coverage under their parents’ policies, first dollar coverage of routine services, and the removal of annual lifetime limits for “essential health benefits.”

– More than half of the employer respondents expect to pass on these ACA-endowed rising costs to employees.

– Moreover, fewer than 30% of employers say they were able to maintain grandfathered status of their healthcare plans. This rapid loss of grandfathered status far outpaces Obamacare’s original estimates of what would happen. The preamble to the June 2010 regulations noted that by the end of 2011, the Obama administration expected 78% of employers would retain grandfathered status. By the end of 2012, they forecast that 62% would still be grandfathered, and by the end of 2013, 49% would retain their grandfathered status.

The new report states: “The accelerated loss of grandfathered status suggests that employers have had to make many plan changes to offset cost increases, and perhaps employers have been more willing to give up grandfathered status in order to take other steps to control costs.”

The upshot: If you like your health plan, you won’t be able to keep it.

10 thoughts on “Study: Obama healthcare reform raising costs, forcing workers out of existing plans

  1. None of these impacts are flaws, they are virtues. The Democrats invested a good deal of time in designing legislation that, in addition to being difficult to repeal, would eventually cause the collapse of the remaining non-government “market” [and I used the term loosely] and require the creation of a single payer health care system. That assumption has to be stated at the outset.

  2. What would have been the increase without the Affordable Care Act? There is this lame effort to pretend that insurance rates were not already rising at astronomical rates. The only change is that insurance companies are now trying to blame ACA for what would have been their increases anyway.

  3. One of the reasons for increased costs is the parents can now pay to keep their college age children on their insurance plans for longer? What? Give us a BREAK from the LYING insurance industry!

    The 20-somethings are the cream of the crop for health insurance companies. 20-somethings don’t get sick, and their tendencies toward thinking they’re invincible leads them to not even go in for annual exams as frequently as older adults. Health insurance companies WANT this age group and they want to dump older Americans. Health insurance companies have ALWAYS WANTED this age group.

    Suddenly the insurance industry is trying to claim they’re losing money because they’re collecting premiums for an age group they know tends to have very low medical expenses? Cut the lies.

    • Keith- I don’t know id you have any teenagers or not, but as a group they are not known for good judgement. That means as you point out , that they don’t see doctors often, postponing any care until when they need it, it is often pretty expensive. Moreover, they have been known to drink and drive, a somewhat risky behavior. Before asserting that they are “lying”, you might want to do some more investigation.

    • “The 20-somethings are the cream of the crop for health insurance companies…..insurance industry is trying to claim they’re losing money because they’re collecting premiums for an age group they know tends to have very low medical expenses?”

      It’s because in insurance the level of perceived risk is a function of time. The longer you insure somebody for the greater certainty that you will be making a payout for a service or procedure. Going from 22 years of coverage to 26 years of coverage is about a 2% change. Hence the reason why rates will go up at least 2%. But it’s also a function of aggregate population. The more people you have to insurance than the total number of reimbursements will rise as well. The White House touts their own number that the increase in age for young people to be covered under their parents health care plan is going to effectively add 2.5 million more people to the insurance rolls. Hence the reason why it could cause rates to go up as high as 5%. Premiums were based on disbursements covering a young person under their parents plan for 22 years. Now they have to raise rates to cover disbursements for this additional period of coverage. It’s called math…….

  4. Eliminate Obamacare this will eliminate over 350,000 jobs and will send the economy into a huge fall costing nearly $1,000,000,000 for each state to comply with all of the regulations.

    The premiums are huge increases that are not warranted. People cannot afford the premiums of Obamacare. Do not let Obamacare destroy America’s Economy.

    There should just be an assigned risk plan for those that cannot qualify due to health reasons that would assign a certain percentage of the un-insurables to each healthy group plan to pick up the slack of those with health problems.

    CRUISER4NEWS

  5. The Commonwealth Fund (http://www.commonwealthfund.org/News/News-Releases/2009/Aug/Employer-Sponsored-Health-Insurance-Premiums-Increase-119-Percent.aspx) reported in 2009 an increase in employer based health insurance premiums had increased 119% from 1999 to 2008. That’s an average for over 13% per year. If the rate now is 2-5% per year, then that seems to demonstrated the ACA is doing what it was designed to do — slow down the increase in premiums.

    The article places a lot of blame on the ACA giving the insurance companies a pass, but the ultimate problem is not the insurance companies — the ultimate problem is the actual cost of health care.

    You have state disciplinary boards who do little (or have the resources) to rid the system of not only incompetent doctors, but those who are taking up to 30% out of the system in overcharging, billing for services not rendered and just out and out fraud.

    While the feds have the Stark Amendment they can enforce, private carriers don’t have that leverage and the referral enterprise system is alive and well on the private side.

    This is merely a one sided article put out by a no longer credible think tank, but one that has politicized itself in order to become yet another cog in the wheel to prevent actual discussion about an industry that is completely out of control at the expense of those who need their services.

    By the way, anyone who knows anything about insurance is this – the larger the risk pool, the cheaper the cost of the risk…unless that risk pool is all high risk. Think of it like you would your car insurance — when you buy coverage from a company who insures only good drivers. By bringing in the under 30 crowd, you have a group who overall costs much less to keep healthy that should reduce the overall cost for everyone. If the premium increases are down to 2-5%, it appears be working, based on the historical increases.

  6. Any ideas out there as to whether increasing the minimum hours of employment to be eligible for group health coverage would cause a plan to lose grandfathered status? The factors for loss of GF status don’t include this kind of change, and there is virtually no guidance on this question.

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