• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Side Effects: Premiums Will Rise Because of Obamacare

    By now, most Americans who have been following the effects of the Patient Protection and Affordable Care Act (PPACA) realize that the health care overhaul is going to cause health insurance premiums to increase. Even President Obama admitted that his health care plan was “going to increase our costs—we knew that.”

    However, the number of provisions in Obamacare that will increase premiums is likely far larger than most people realize. In recent research, Heritage analysts Brian Blase and Rea Hederman, Jr., highlight a dozen ways in which Obamacare will raise premiums. Three of the reasons they cover are listed below. To read about all twelve, check out this link.

    Mandated Benefits

    “Obamacare mandates that insurance companies cover a minimum package of benefits. The more comprehensive and generous the insurance, however, the more expensive it will be.”

    Minimized Youth Discount

    “The average 60-year-old consumes about six times as much health care as the average 20-year-old, but Obamacare mandates that insurers charge the oldest individuals in the risk pool no more than three times the lowest rate. As a result, young individuals will pay much more than the actuarially fair amount for their premiums.”

    Adverse Selection

    “Since heath plans will be required to extend coverage to any qualified applicant and will not be allowed to vary premiums based on health status, healthier individuals will likely wait until they are sick before they buy health insurance. With fewer healthy individuals buying coverage, premiums will need to rise to cover the costs of the sick, which will in turn drive even more individuals in good or even fair health to drop coverage.”

    In their research, Blase and Hederman delve into these and nine other provisions of the new health care law that will increase premiums. For more information, please read “Obamacare Increases Health Insurance Premiums.”

    This post was co-authored by Charles Adair.

    Posted in Obamacare [slideshow_deploy]

    3 Responses to Side Effects: Premiums Will Rise Because of Obamacare

    1. Robyn, Salem, OR says:

      My husband and I have our own business and have private health care coverage through BCBS of Oregon. We just received our health insurance packet for 2011 and our bill went up $397 per month which is a 30% increase. We will now be paying $1352 per month for health insurance, no dental or vision. We knew it was coming of course, just never thought it would be so much of an increase. Really makes us wonder why it is we're working so hard…….We've been in shock since the mail came today!

    2. Rita Woods, Mi says:

      I retired this year, I am only 60, my health care from my work went up 50% from 483 to 883.00 per month…………I am single………..this is for one person. This is crap.

      I will surely vote differently for the up coming elections.

    3. Sonja says:

      It sounds like you both are better off taking that money and putting into a seperate account that will accrue interest! Than you can just pay out of pocket. That's what I do. Although, I am under 30 and will be going to medical school (so I'll have health insurance through school).

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.