Georgia Health Insurance 411

Pricewaterhouse Coopers took a lot of flack over their cost study that proved health insurance premiums will RISE if the Baucus version of Obamacare is passed. Careful observers will note that the White House and politicians did not dispute the findings that PREMIUMS will rise, but rather said the cost will go down for individuals and families once the taxpayer subsidies are factored in.

Playing word games.

Under proposed health insurance reform, premiums MUST rise to account for the additional risk the carriers take on by insuring anyone with a check in hand, regardless of their medical history. Add in the other benefit mandates such as mental health parity and premiums will increase significantly.

Now the WSJ Blog reports that Wellpoint (Blue Cross) has done their own study using their own internal data, not some made up junk from the CBO.

At the request of Congressional delegations worried about their constituents—call it a public service—WellPoint mined its own actuarial data to model ObamaCare in the 14 states where it runs Blue Cross plans. The study therefore takes into account market and demographic differences that other industry studies have not, such as the one from the trade group America’s Health Insurance Plans, which looked at aggregate national trends.

In all of the 14 states WellPoint scrutinized, ObamaCare would drive up premiums for the small businesses and individuals who are most of WellPoint’s customers.

Of course some will argue, if premiums increase that is good for the health insurance companies.

But not necessarily so.

If premiums are already unaffordable for some, how many more will have to bail on health insurance when premiums immediately go up to account for Obamacare?

Rather than relying on taxpayer funded subsidies, why not address the underlying causes that inflate premiums? Allowing carriers to offer plans free of state mandates will result in an immediate 20 – 30% drop in premium levels. In the half a dozen states where guaranteed issue (no underwriting for pre-existing medical conditions) is mandated, dropping that mandate will save another 30% or so.

Not even two hours after Wellpoint had presented its materials on the Hill, Democrats were already trashing it—which, considering that it runs to some 238 pages and took weeks to prepare, must have required remarkable powers of digestion and analysis.

Evelyn Wood would be so proud . . .

Sounds like Congress and the Obama House are criticizing something they have not read. Of course most will admit they never read the legislation they vote on so why should this be any different?

What distinguishes the Wellpoint study is its detailed rigor. Take Ohio, where a young, healthy 25-year-old living in Columbus can purchase insurance from WellPoint today for about $52 per month in the individual market. WellPoint’s actuaries calculate the bill will rise to $79 because Democrats are going to require it to issue policies to anyone who applies, even if they’ve waited until they’re sick to buy insurance. Then they’ll also require the company to charge everyone nearly the same rate, bringing the premium to $134. Add in an extra $17, since Democrats will require higher benefit levels, and a share of the new health industry taxes ($6), and monthly premiums have risen to $157, a 199% boost.

Meanwhile, a 40-year-old husband and wife with two kids would see their premiums jump by 122%—to $737 from $332—while a small business with eight employees in Franklin County would see premiums climb by 86%. It’s true that the family or the individual might qualify for subsidies if their incomes are low enough, but the business wouldn’t qualify under the Senate Finance bill WellPoint examined. And even if there are subsidies, the new costs the bill creates don’t vaporize. They’re merely transferred to taxpayers nationwide—or financed with deficits, which will be financed eventually with higher taxes.

Oops!

Higher premiums, lower “costs” (due to subsidies), higher taxes.

Sounds like a plan.

The story is largely the same from state to state, though the increases are smaller in the few states that have already adopted the same mandates and regulations that Democrats want to impose on all states. For the average small employer in high-cost New York, for instance, premiums would only rise by 6%. But they’d shoot up by 94% for the same employer in Indianapolis, 91% in St. Louis and 53% in Milwaukee.

Note the comment that folks in NY, who already have sky high premiums due to Obamacare type mandates, will actually catch a break. That’s good to know.

Democrats have been selling health care as one huge free lunch in which everyone gets better insurance while paying less. But the policy facts simply don’t add up, and Democrats are attacking WellPoint because they don’t want anyone to understand what their health-care schemes will mean in practice. Democrats know that if the public is given the facts and the time to consider them, Americans might demand that Democrats stop pushing the country off this cliff and start all over.

So now you know.

Question is, what will you do about it?

Smaller cars, bigger health insurance premiums, Poppa Washington.