27 Ways ObamaCare Increases Your Health Insurance Premium

It’s the list you’ve always needed.

  • Item 1 explains the $8 billion in new taxes that insurers must pay the federal government in 2014, an amount that increases through 2018 and then applies in all of the years to come. The tax is not deductible. With corporate taxes, this means that a company must collect $1.35 to cover an additional $1.00 in ObamaCare taxes. As part of the war on private enterprise, nonprofit insurers pay less. Companies that play ball with the government, by getting at least 80 percent of their revenues from government programs, pay nothing at all.
  • Item 10 explains that patients will pay an estimated $2.3 billion more for prescription drugs. This is the result of a new tax on innovator drug companies. It taxes success because companies that innovate more pay more.
  • Item 17 is the $25 million in transitional reinsurance program fees. One estimate puts their cost at $63 per covered life per year. The money will be taken from insurers and self-funded plans and transferred to state nonprofit entities and the Treasury. It is supposed to be used to “stabilize” the individual market, a market that was stable before ObamaCare passed.
  • Item 19 covers the limit on the waiting period for enrollment into employer plans. Companies in construction and transportation, industries with high turnover, typically required waiting periods of 6 to 12 months before employees could join employer plans. ObamaCare puts a 90 day limit on waiting periods. Now that an employee can work 3 months, then have a medical procedure and quit, employer costs are expected to increase by 4 percent in industries with 6 month waiting periods and by 25 percent in those with 12 month waiting periods.
  • Item 22 is the slacker mandate, the requirement that “children” up to age 26 must be covered by family policies. The estimated additional premium cost for this was 1 percent in states that did not already have the mandate.

In PDF form, the list prints on the front and back of one page. Brief summaries and references are included. It is published through the Independence Institute, and intended for public use.

Comments (16)

Trackback URL | Comments RSS Feed

  1. Dewaine says:

    “Item 22 is the slacker mandate”

    Calling it what it is, how rare these days.

  2. Ashley says:

    That is a depressing list. Especially item 1

  3. Dewaine says:

    Effects: Businesses will close, innovation will stagnate, insurers will fail, individuals will suffer and “children” (up to 26) will play more video games. Did I miss anything?

  4. Karl says:

    “$8 billion in new taxes that insurers must pay the federal government in 2014”

    -This means less $$$ to spend.

  5. Buster says:

    Bottom line: when the government mandates additional benefits beyond what you might otherwise buy, the cost has to go up. It’s not a conspiracy; it’s not political hype. The only think remotely makes coverage affordable about the Affordable Care Act is the subsidies, which taxpayers children are expected to pay in the future. That doesn’t make health coverage affordable; it merely foists the cost on future taxpayers.

  6. Tim says:

    I don’t want my premium to increase!

  7. Bob Hertz says:

    Good summary, but Linda your item #17 is a bit of a cheap shot.

    Every single European country that uses private insurers has substantial risk adjustment funds, to make up for not allowing strict medical underwriting.

    And every one of them collects a tax from those insurers with better than average risks.

    In fact I think that Medicare Advantage has risk adjustment funds also, though I do not know how they are collected.

    So this is NOT a case of bad management in the ACA. There are lots of other things that are bad management, of course.

  8. Linda Gorman says:

    Bob, until ObamaCare turned the US health care system into a European model wannabe, we didn’t need to pay for “substantial risk adjustment funds.”

    Adopting laws that require them does in fact raise premiums to no good effect. As I’m sure you remember, federal law already required states to have insurance arrangements to cover those who could not be medically underwritten.

  9. Bob Hertz says:

    Linda, you are correct that risk adjustment raises premiums. I read that in Denmark over 40% of premiums go towards risk adjustment.

    Your last sentence puzzles me though. Maybe federal law did require states to have insurance arrangements for the uninsurable.

    But to my knowledge, about 20 states had no high risk pools whatsoever before 2012, and 20 others had long waiting lists. Only Minnesota and a few other states had open pools (I know because I was in the pool.)

    So if there was a law, then a lot of states were happily ignoring it.

    There was a baffling regulation about continuous coverage for those who lost employer insurance. I tried to use that regulation before I went to the MN pool. Blue Cross brusquely told me that they stopped offering that type of continous guaranteed issue individual coverage.

    The ACA may be guilty of drafting a $50 billion solution to a $2 billion problem.

    But there was a real problem!

  10. Linda Gorman says:

    Some states had insurers of last resort rather than high risk pools.

  11. Bob Hertz says:

    Linda, I will still bet you $5 that over 20 states had neither the insurer of last resort or a functioning pool.

    A high risk pool has to be subsized from somewhere.
    The pure actuarial premiums for the people who sign up are at least $15,000 a year.

    Several Cato and Heritage writers called for more high risk pools, but I honestly do not remember if they also advocated federal funding help.

    The stingier states did next to nothing for the uninsurables. That blanket opposition to new taxes was hurtful.

  12. Harry Stamper says:

    Well I can bet that still Obamacare is effective in providing better health care programs with better health insurance; but as expected we have found Obamacare under a worst circumstance. Here also we have found that how Obamacare increase our health insurance premium.