ObamaCare Architect: Expect Steep Increase in Health Care Premiums
This is from The Daily Caller:
Massachusetts Institute of Technology economist Jonathan Gruber, who also devised former Massachusetts Gov. Mitt Romney’s statewide health care reforms, is backtracking on an analysis he provided the White House in support of the 2010 Affordable Care Act, informing officials in three states that the price of insurance premiums will dramatically increase under the reforms.
Here are some specifics:
- In Wisconsin, “After the application of tax subsidies, 59 percent of the individual market will experience an average premium increase of 31 percent,” Gruber reported.
- He estimated 32 percent of Minnesotans will face premiums hike similar to those of their neighbors in the Badger State.
- In his Colorado analysis, Gruber wrote, “13 percent of people will still face a premium increase even after the application of tax subsidies, and seven percent will see an increase of more than ten percent.”
Gives a whole new meaning to the term “from the horse’s mouth..”
Gruber finally fesses up.
It was always a given that mandating essential benefits would increase premiums. However, for some reason, proponents of health reform argued that health coverage can only be affordable when everyone is covered. What they really mean is that coverage will be affordable for the old and sick when the young and healthy are forced to cross-subsidize the old and sick.
Do you have a link to his piece itself?
Not surprised by this, obviously he knows enough economics to know the truth. He got his recognition and political clout, so now he needs to protect his academic reputation.
According to the Congressional Budget Office (CBO), part of the reason the Affordable Care Act (ACA) will increase individual premiums is because it will force families to have health plans more comprehensive than most families currently have.
When people purchase insurance in the individual market, they tend to sign up for high-deductible policies that feature higher cost-sharing in return for lower premiums. For example, a middle-age family of four in Dallas will find the decrease in premiums by moving from a $1,000-deducible health plan to a $5,000-deductible plan is nearly $10,000 per year. The corresponding increase in risk exposure is only about $8,000 [($5,000-$1,000) x 2]. Why would anyone spend $10,000 more just to reduce their family’s financial exposure by $8,000? Of course, they shouldn’t. However, in an attempt to make comprehensive coverage affordable to people with pre-existing conditions, the ACA will limit the choice of families to opt for higher deductible policies in return for lower premiums.
Wait, I thought the President said we would save $2,500 per family per year in health insurance premiums.
Gruber probably knew early on that he would have to come out and reveal at some point that premiums would rise.
Expect steep increases? Sorry, already happened for those of us who pay for our own.
Guess this means we should expect more steep increases?
Michael I have been tknihing about this blog of yours and what and how you write. May I make a suggestion to you: you are making the assumption that your explanation for the higher health care costs in MA are true. You do not know that definitively yet your argument suggests it is absolute. YOu may want to phrase your argument with the idea that if this were the reason. Also you may want to explain about regulation – what regulation and why. For the average reader, they may not know. One last thing: I think that many of your ideas are fresh and provide a perspective that suggests some thought and study; however, your future electorate may find that your ideas are leaning toward a philosophy that is quite alien to their own. If it were possible, I would try to listen to what people have to say about premiums and health care and what their concerns are before I posted any comments. Not that you would necessarily change your position, but certainly you would have a better idea how to present your ideas because you understand your electorate. My best, Bonnie Tonita White