The Senate Health Care Bill Could Make Premiums Skyrocket

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By Robert Donachie

The Kaiser Family Foundation released Monday the impact the Senate’s bill to repeal major portions of Obamacare would have on premiums, and the results do not bode well for nearly all consumers.

Kaiser estimated premium increases in 2020 by county for individuals at ages 27, 40 and 60 with annual incomes of $20,000, $30,000, $40,000, $50,000, $60,000, $75,000, $100,000, or 351% of the federal poverty level, according to the Kaiser Family Foundation report.

Kaiser’s research found that premiums for Obamacare Silver plans, across all age groups, would rise an average of 74 percent.

The net effect of the proposed Senate bill would mean younger, healthier people would pay less in premiums but older people would pay substantially more.

For individuals under the age of 18, premiums are anticipated to rise somewhere around 10 percent in 2020. For people between 55 and 64, premiums in 2020 would rise 115 percent.

Some 66 percent of Obamacare enrollees have annual incomes at or below 250 percent of poverty –approximately $31,250 for a single individual. Another 44 percent of enrollees have incomes at or below 150 percent of the federal poverty level.

Under the Senate bill, insurance providers would be able to charge premiums five times higher for older individuals than younger people. Obamacare allows insurance companies to charge three times higher for older people.

Obamacare subsidies, like cost-sharing reductions, will also be significantly smaller under the Senate proposal.

Obamacare insurance exchanges stratify health coverage options into tiers, which are defined based on their respective cost to insurers versus the consumer. The overwhelming majority of consumers – 85 percent – have Silver plans. Obamacare subsidies are tied to Silver pans.

Silver plans have an actuarial value (AV) of 70 percent, meaning that the insurer covers 70 percent of all health care costs, while enrollees pay the remaining 30 percent through deductibles, copays and coinsurance.

The Senate bill reduces the AV to 58 percent, which means enrollees must cover the other 42 percent of medical costs.

Overall, consumers would have higher out-of-pocket costs for their health care.

Soaring premiums are a problem with the current legislation and one of the features of Obamacare that Republican lawmakers continuously say needs immediate attention.

Obamacare introduced new regulations into the health care marketplace that contributed to premiums doubling after the legislation took full effect in 2014, according to a May report from the Department of Health and Human Services (HHS).

HHS compared premiums in the exchange marketplaces in 2013, one year before Obamacare regulations took full effect, to premiums in the exchange marketplace in 2017. The report found that average monthly premiums increased from $224 in 2013 to $476 in 2014. That constitutes a 105 percent increase in only 4 years.

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