As a resident of Ohio and purchaser of individual health insurance, I am particularly interested in how Ohio is impacted by the Obamacare reforms. In a previous post this year I performed a simple price check of similar health care policies in Ohio and in Massachusetts using my family information. Massachusetts was chosen as a proxy for Obamacare. The policy in Ohio would cost me $305 a month and $1,296 if I lived in Massachusetts. I tried and failed to find an extra benefit offered in Massachusetts plan was necessary for my family. My conclusion was that the higher rates required in Massachusetts were an income redistribution scheme that resembled a tax more than a traditional insurance plan. The Milliman report linked below provides additional evidence that the expected individual policy rate hikes are more about bringing more money in to the insurance companies than providing benefits for policy holders. As a purchaser of health insurance for over 30 years, health insurance has gotten progressively worse in benefits for the cost as it has migrated to a more tax like system. The idea that we are trying to model our national health care after a state in which all of their people paying $1,296 a month or higher for their health insurance is not rational since the rest of the world is paying half that amount. If $1,296 a month is the best Massachusetts can do, than we need to pick a different state to model our health care after. Health care as a tax is not working. If we assume that Obamacare will fail because of insurance rates that are too high, then our national health care plan should be modeled after the individual insurance policies offered in Ohio, essential services offered at a reasonable rate.
Americans knew the negative impact Obamacare would have on the nation before the law even passed. Millions of Americans will be added to Medicaid, which already provides low-quality coverage and patchy access to care. The new law will not result in universal coverage, despite its $1 trillion+ price tag. Premiums will go up. And Americans who like their current health plans will not be able to keep them.
Now, states are beginning to better understand the impact of Obamacare. Earlier this month, Gorman Actuarial and Jonathan Gruber reported on Wisconsin residents’ moving out of existing coverage and experiencing premium hikes.
Milliman, an independent consulting firm, recently released its findings on the law’s effects in Ohio.
Greater dependence on government coverage. The most striking finding of the study is the expansion of taxpayer-funded, public health care programs under the new law. Before Obamacare, enrollment in Ohio’s public health programs, including Medicaid, was a little more than 2 million. Now, Ohio (and federal) taxpayers will be picking up the tab to expand these public health programs by 52 percent. Of the more than 1 million state residents added to these programs, more than half had coverage before the law passed, and only 47 percent were uninsured in 2010.
Though Obamacare expanded Medicaid by as many as 25 million Americans and created a new health entitlement, millions of Americans will still go without coverage. In Ohio, only 53 percent of the uninsured will have coverage in 2017, when all the provisions of the law will be in effect. Real health care reform could expand coverage for those who are currently uninsured without these negative consequences, and with better success than Obamacare.
Escalating premiums. The Milliman study also shows across-the-board increases in premiums resulting from the new law, on top of customary growth due to medical inflation. Premiums will grow by 3 percent to 5 percent in the large group insurance market, 5 percent to 15 percent in the small group market, and a whopping 55 percent to 85 percent in the individual market. As the authors point out, these numbers represent the estimated average premium impact and will vary based on age and health status. According to the report, “In the individual market, a healthy young male may experience a rate increase of between 90% and 130%.” At the same time, older and less healthy individuals could see a decrease.
Premium increases will result from a number of policies and effects of the new law. These include new benefit requirements, age rating, and other types of requirements placed on insurers. They also include shifting of costs by providers from publicly covered individuals to the privately insured; the authors warn that “The significant expansion of the Medicaid population may result in increased charges to commercial payors to account for low provider reimbursement under Medicaid.”
The impact of Obamacare on Ohio is clear: The huge expansion of government-run health care will raise costs for state residents by increasing taxpayer funding of government health care programs and by escalating health care costs. The Milliman study is the latest reminder of why Obamacare must be repealed.
New Study Shows Obamacare’s Impact on Ohio Coverage and Premiums
Mon, 26 Sep 2011 22:30:06 GMT