Ohio Says No to Obamacare and Higher Premiums

With Buckeye State voters approving Issue 3, which prohibits government from forcing them to buy Ohio health insurance, Ohioans seem to have spoken out against a government-knows-best set of directives.

Many objections have been raised against Obamacare from different quarters, and one of the most important is about the effect it will have on raising health insurance Ohio premiums for individuals and families. Obamacare has many restrictions and expensive mandates that will push up health care costs, causing premiums to rise. In fact, the effect on premiums is already evident.

The Employer Health Benefits Survey by the Kaiser Family Foundation reported that health insurance Ohio premiums rose by 9 percent in 2011, raising the average rate for a family to $15,073. This is in addition to the increases of 5% in 2009 and 3% in 2010. The Kaiser study predicts that premiums will hit a high of $32,175 by 2021.

A report conducted by Milliman Inc. forecasted that individual premiums in Ohio could rise by 55 to 85 percent in 2014, excluding any costs caused by medical inflation. Further, based on their current state of health, some individuals are expected to experience a 90 to 130 percent increase in their health insurance Ohio premiums while others may see decreases.

The major factors that are expected to drive health care spending and premium increase under Obamacare are: • Preventive care services: The health care law requires insurers to offer coverage of certain preventive services at no cost. This will increase the use of healthcare services, thereby raising the cost of health care. • Minimum benefits package: Obamacare directs insurance companies to offer a minimum or essential package of benefits. In some cases, the new law also prevents insurers from fixing limits on the amount of services individuals can use. The effect of both these mandates will be to raise health plan cost and premiums.
• Ban on state-of-health based underwriting: Underwriting is performed by insurers to establish an applicant risk, and healthy individuals are offered discounted premiums. Under Obamacare, insurers are banned relying on a person’s state of health to determine premiums. This would mean higher premiums even for people in relatively good health. • Lower discounts for youth: Older people use more health care services but under Obamacare mandates that the premiums that the oldest individuals in the risk pool are just three times higher than the lowest rate. This means younger people will end up paying higher premiums. Management consulting firm Oliver Wyman estimates that “premiums will rise by 45 per cent for those age 18-24, 35 percent for those age 25-29 and 26 per cent for those age 30-34”.1 • Mandatory coverage for children under 26 and no annual or lifetime limits on health benefits: Keeping children in their parents’ health plan up to age 26 and the ban on annual and lifetime limits on health benefits have already led leading insurers to raise premiums.

Low Medicare reimbursement rates and higher taxes on insurers, medical device manufacturers and pharmaceutical companies are other factors that would cause premiums to rise.

These predictions are only the tip of the iceberg. The impact of Obamacare’s new Ohio health insurance tax alone is expected to increase health care costs and distort the nation’s financial health by increasing taxes, leading to job losses, distorting the market and extending federal control. It’s no wonder that the voice to repeal Obamacare is growing stronger by the day – not only in Ohio, but in the nation as a whole.

References:

1Estimated Premium Impact of Annual Fees assessed on Health Insurance Plans, October 31, 2011, by Chris Carlson, Oliver Wyman

Obamacare and Insurance Benefit Mandates: Raising Premiums and Reducing Patient Choice, by Edmund Haislmaier, January 20, 2011, The Heritage Foundation
Obamacare Increases Health Insurance Premiums, by Brian Blase and Rea Hederman, Jr., September 21, 2010
The Senate Health Bill: Cost of the Insurance Premium Tax to Individuals and Families, by Edmund Haislmaier, December 9, 2009, The Heritage Foundation