Obamacare will cost ya'! Or will it?

[merithyn]

From the Examiner:

Internal cost estimates from 17 of the nation's largest insurance companies indicate that health insurance premiums will grow an average of 100 percent under Obamacare, and that some will soar more than 400 percent, crushing the administration's goal of affordability.

New regulations, policies, taxes, fees and mandates are the reason for the unexpected "rate shock," according to the House Energy and Commerce Committee, which released a report Monday based on internal documents provided by the insurance companies. The 17 companies include Aetna, Blue Cross Blue Shield and Kaiser Foundation.

The report found that individuals will face "premium increases of nearly 100 percent on average, with potential highs eclipsing 400 percent. Meanwhile, small businesses can expect average premium increases in the small group market of up to 50 percent, with potential highs over 100 percent."

One company said that new participants in the individual market could see a premium increase of 413 percent when new requirements on age rating and required benefits are taken into account, said the report. "The average yearly cost for a new customer in the individual market grows from $1,896 to $3,708 -- a $1,812 cost increase," it added.

The key reasons for the surge in premiums include providing wider services than people are now paying for and adding less healthy people to the roles of insured, said the report.

It concluded: "Despite promises that the law will lower costs, [Obamacare] will in fact cause the premiums of many Americans to spike substantially. The broken promises are numerous, and the empirical data reveal that many Americans, from recent college graduates to older adults, will not be able to afford the law's higher costs."

Except that:

NEW YORK, May 13, 2013 – In the seven years since Massachusetts enacted its universal healthcare law, the number of people covered by insurance through the workplace increased, running counter to nationwide trends at the same time.  PwC's Health Research Institute (HRI) today released the first of a two-part series called, The Massachusetts Experience, examining the real-world implications of health reform in the first state in the nation to move forward with a broad expansion of coverage. The first installment focuses on shifts in the employer-based market and details the financial implications of the federal tax exclusion for health insurance.

"While each state and industry is different, Massachusetts' experience may offer clues into how health organizations, the business community and individuals might react to elements of the Affordable Care Act set to take effect in 2014," said Robert Valletta, PwC U.S. healthcare provider leader based in Boston.  "Despite concern that the Affordable Care Act signals the end of employer-sponsored health coverage, our analysis of the Massachusetts experience paints a more complex picture."

Employer-sponsored insurance rose about 1 percentage point in Massachusetts while the national rate fell by 5.7 percentage points.  The Massachusetts growth occurred in the midst of the recession and at a time when health insurance premiums in the state rose to the highest levels in the nation.  HRI's in-depth analysis of the Massachusetts experience -- and the impact of the tax exclusion -- found that employer-sponsored insurance is often financially beneficial to both employers and employees.

"Health insurance benefits are a significant part of the total compensation package for a workforce, and that's not likely to go away when the Affordable Care Act goes into full effect," said Michael Thompson, PwC U.S. human resources services principal focused on healthcare.  "Employer-sponsored coverage will continue to be a critical pillar of the U.S. health system, and it has been an important part of employer strategy to attract and retain talent, and promote improved health and productivity.  Most employers see this return on investment, alone, as a compelling reason to continue offering coverage."

According to HRI's analysis and interviews with experts in Massachusetts, two key factors shaped the Massachusetts experience:  the individual mandate, which drove up demand for coverage, and the tax implications for both employers and employees.

The analysis found that for Americans earning more than 400 percent of the federal poverty level, or about $45,960 for an individual, a combination of salary and health benefits obtained through an employer is likely to be a more efficient way to be compensated.  It also found that due to federal tax exclusions, businesses can save thousands of dollars per employee by using that compensation strategy.

HRI's analysis includes a case study that illustrates the tax implications for employers and employees.  The second report on the Massachusetts Experience, to be released later this month, will take a closer look at the implications for state's hospitals, physicians and insurers.

I work for one of the smaller health insurance companies (we insure folks in Illinois, Iowa, Washington, and parts of Nebraska) and our rates are only going up about 5-10%. It seems to me that the Big Companies are using this as an excuse to raise rates more than that Obamacare is costing more.