Less-bad news is still bad news

If you were told that your health insurance premiums would be doubling next year, would you be celebrating? Only if you were expecting them to triple. A new study of ObamaCare health insurance premiums in 17 states and the District of Columbia suggests that the cost for consumers will be lower than the previous Congressional Budget Office...

If you were told that your health insurance premiums would be doubling next year, would you be celebrating? Only if you were expecting them to triple.

A new study of ObamaCare health insurance premiums in 17 states and the District of Columbia suggests that the cost for consumers will be lower than the previous Congressional Budget Office estimates. While that news is being lauded by some, the harsh reality is that premium rates are increasing by an average of 24 percent in the one-quarter of states that have made their rates public. But the “average” doesn’t tell the whole story.

Many young, healthy people will face “rate shock” when they face much high premiums under ObamaCare than they currently pay for health insurance in the individual market. It is too bad that, even though Illinois state officials have the information, they have not released what ObamaCare health insurance will cost here in the state.

To illustrate what rate shock might look like in Illinois, let’s take a young, healthy man in Chicago. He could face a premium insurance increase from $756 a year to $2,268 a year under ObamaCare – triple the cost.

While tax credits could offset some of those costs, his premium still might more than double. For example, a 25-year-old nonsmoking male who makes $25,000 a year might be eligible for $538 in tax credits to buy health insurance under the health insurance exchange. That would be more than double what he is paying for coverage now.

That same young man earning $20,000 would be eligible for a more generous subsidy. He still would face an estimated 35 percent increase, even after applying the subsidy.

Table 1. Estimated annual premiums and subsidies for young, nonsmoking male in Chicago with no children and $25,000 annual income

Table 2. Estimated annual premiums and subsidies for young, nonsmoking male in Chicago with no children and $20,000 annual income

Some are claiming that increasing premiums under ObamaCare are attributable to a more generous set of health benefits. Guest posts at the Incidental Economist, using health insurance premium data for Sacramento, Calif., debunk that theory here and here.

Higher costs, even if they are lower than a previous estimate, still are higher and will be for most people who buy health insurance on their own. Named the “Affordable Care Act,” preliminary evidence shows that ObamaCare will do the opposite.