The entire premise behind the Democrats’ and President Obama’s health care reforms is that the current rate at which health insurance premiums are increasing is simply unsustainable, so government has to step in and take a larger role in how insurance is implemented. According to an audit conducted by Pricewaterhouse Coopers (via the Washington Post) that was requested by America’s Health Insurance Plans, the health reform bill that is currently in the Senate Finance Committee and will be voted on tomorrow will drive up health care premiums even more than if the reforms were not enacted:
America’s Health Insurance Plans engaged PricewaterhouseCoopers (PwC) to examine the impact of four components of the health reform bill being proposed by the Senate Finance Committee as introduced. These include:
- Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.
- An excise tax on employer-sponsored high value health plans (or “Cadillac plans”) that in a few years could also raise premiums for some moderate value plans.
- Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers. These changes are expected to more than offset the potential reduction in cost shifting resulting from providing coverage to the uninsured.
- New taxes on health sector entities that are likely to be passed through to consumers.
The audit indicates that these increases will be on top of what we already are expecting for increases in health care premiums. America’s businesses and consumers who currently have private health insurance had better hang on to their wallets, because they are going to pay a lot more for their health insurance premiums if the Baucus bill becomes law:
This analysis shows that the cost of the average family coverage is approximately $12,300 today and could be expected to increase to approximately: $15,500 in 2013 under current law and to $17,200 if these provisions are implemented. $18,400 in 2016 under current law and to $21,300 if these provisions are implemented. $21,900 in 2019 under current law and to $25,900 if these provisions are implemented.
This analysis shows that the cost of the average single coverage is $4,600 today and could be expected to increase to:
$5,800 in 2013 under current law and to $6,400 if these provisions are implemented. $6,900 in 2016 under current law and to $7,900 if these provisions are implemented. $8,200 in 2019 under current law and to $9,700 if these provisions are implemented.
These increases are in line with what Wendy Button, former speech writer for Barack Obama, John Edwards, John Kerry, and Hillary Clinton, experienced when she moved from Washington DC to Massachusetts:
Since I care more about my country than my personal pride, here’s how I lost my insurance: I moved. That’s right, I moved from Washington, D.C., back to Massachusetts, a state with universal health care.
In D.C., I had a policy with a national company, an HMO, and surprisingly I was very happy with it. I had a fantastic primary care doctor at Georgetown University Hospital. As a self-employed writer, my premium was $225 a month, plus $10 for a dental discount.
In Massachusetts, the cost for a similar plan is around $550, give or take a few dollars. My risk factors haven’t changed. I didn’t stop writing and become a stunt double. I don’t smoke. I drink a little and every once in a while a little more than I should. I have a Newfoundland dog. I am only 41. There has been no change in the way I live my life except my zip code — to a state with universal health care.
Massachusetts has enacted many of the necessary reforms being talked about in Washington. There is a mandate for all residents to get insurance, a law to prevent insurance companies from denying coverage because of a pre-existing condition, an automatic enrollment requirement, and insurance companies are no longer allowed to cap coverage or drop people when they get sick because they forgot to include a sprained ankle back in 1989 on their application.
Even if the economy was strong and I was working more, I still couldn’t afford my premium. I am not alone; I’ve got 46 million friends in a similar situation. We wake up every day worried that a bad cough, an accident while walking the dog, or that dreaded pain on the right side of the abdomen will send us into complete financial ruin.
What Ms. Button is experiencing is what almost always happens when government gets involved and starts meddling: things get worse, not better. If health care reform along the lines of what is being proposed in Congress is implemented, we will still have many uninsured Americans but not because they choose to be uninsured. They will be forced out of the health insurance policies they like, just as Ms. Button was. If there is a government run public option, they will be forced onto that plan, which is exactly what President Obama promised would not happen.