Tuesday, September 27, 2011

Higher Premiums Today–And Higher Premiums Tomorrow

As we’ve previously reported, the main take-away from the Kaiser survey of employer-sponsored coverage is that premiums rose this year by an average $1,303 per family – with researchers directly attributing several hundred dollars of that increase to Obamacare.  The White House claims that this is an aberration, and premium increases will moderate in the future.  However, a look at other elements of the survey demonstrates exactly how many Americans will be affected by higher premiums when all of Obamacare’s mandates take effect:

  • Six percent of covered workers face a waiting period of four or more months (Exhibit 3.8, p. 51), but the law specifies that employers must shorten waiting periods to no more than 90 days.  These workers will face premium increases thanks to Obamacare.
  • Nearly one in eight (12%) covered workers – and more than one in four (28%) covered workers in small firms – have single deductibles of $2,000 or more (Exhibit 7.6, p. 102).  But the law caps deductibles for a single policy at $2,000.  These workers will face premium increases thanks to Obamacare.
  • Nearly two in five (38%) workers in high deductible health plans have family plan deductibles of over $4,000 (Exhibit 8.10, p. 148).  But the law caps family plan deductibles at $4,000 per year.  These workers will face premium increases thanks to Obamacare.
  • More than one in six covered workers (17%) are in plans with no annual out-of-pocket maximum (Exhibit 7.29, p. 125).  But the law prohibits annual limitation on cost-sharing above a government-defined threshold.  These workers will face premium increases thanks to Obamacare.
  • One in ten (10%) covered workers in large firms, and more than one in six covered workers in small firms (17%), are subject to an annual limit on benefits (Exhibit 14.5, p. 222).  But the law prohibits these annual limits.  These workers will face premium increases thanks to Obamacare.

All these workers will face premium increases as a direct result of provisions in Obamacare.  And that assumes that workers will get to keep their coverage at all.  For the more than one in six (17%) of workers in high-deductible plans, Secretary Sebelius and HHS will publish regulations that hold the potential for many, if not most, high-deductible plans to be considered NOT “government-approved.”  And as one senior HHS official commented, employers may “dump” their firms in government-sponsored Exchanges – meaning workers would lose their existing employer coverage entirely.

The Administration is claiming that today’s higher premiums are an anomaly.  But looking at the survey data, and analyzing the provisions of the law, it becomes obvious that when it comes to skyrocketing premiums thanks to Obamacare, you ain’t seen nothing yet.