Insurance Premiums Higher Than Hoped on Healthcare Exchanges

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The Affordable Care Act or Obamacare is, no matter what one thinks of its merits or flaws, a hugely ambitious undertaking. As the premier piece of legislation to come out of President Obama’s first-term, when it was first announced it was packaged as an attempt by the government and hospitals to reduce the ever-increasing costs of healthcare that seem to be the natural by-product of a for-profit health system. However, as the details of the law were hammered out through fierce negotiation and filled hundreds of pages of legislation, how effectively it would lower costs was indeterminate.

With the law taking effect officially on January 1, 2014, some citizens are finding out that their bare-bones healthcare coverage that did not meet the requirements of the law are being discontinued, and plans on the exchanges cost significantly more for these individuals. An article in The Los Angeles Times profiles a number of professionals in California who don’t qualify for subsidies and find the cost of the available plans too high.

This is not a localized problem, according to this infographic compiled by Forbes, which shows the pre-Obamacare rates for all 50 states, then compares the rates to those states who’ve reported post October 1 numbers. States like Colorado and Ohio saw significant decreases in their premiums, but New Mexico, Washington, and Oregon all have increased.

The off-set of the cost for private insurers was going to be the increased pool of young people who would get insurance that would not otherwise have it. However, with many of these rates significantly higher than the tax penalty for not being insured, those who would otherwise have insurance might drop their coverage.

The part of the law meant to address these rate hikes, the governmental public option, was killed before the law was passed. By offering a cheaper plan that met the Obamacare requirements, there would be a market incentive for the private insurers to lower their own rates. Opponents killed the idea by successfully selling it as a step away from single-payer, when in fact many Blue Dog Democrats who were against the option are supported financially by private insurance companies.