A new analysis from FactCheck.com on the Affordable Care Act shows that not much will be different as the law is put into place for those who get insurance through their employers, and that’s the bulk of Americans. The Society of Actuaries/Lewin Group report estimates that those with employer-based insurance will decline by 2 million because of the law, for a total of 155 million people.
The analysis estimated that for the individual, or nongroup, market, the “cost per member per month will increase 32 percent under ACA, compared to pre-ACA projections.” But that’s costs for insurance companies, not an increase in premiums. In fact, the report didn’t attempt to estimate what the change might be in premiums.
Instead, it said: “We focused only on the changes in allowable costs. Actual premiums will vary for each insurer based on many factors which are beyond the scope of this report, since each insurer will have different circumstances and strategies with regard to competition.”
It’s true that insurers, like any other business, could pass along any increased costs to customers, in this case policyholders. So if costs go up, premiums would likely go up.
The report notes that the costs will vary by state, with states that already limit premium variability based on age or health status – known as community rating – not seeing much of an increase. In fact, their costs could decrease, as “younger and healthier individuals … will enroll due to the reduced cost from the premium subsidies,” the report says. States without community rating will experience an increase in costs as older and sicker individuals who previously didn’t have insurance are able to get it.
While the Congressional Budget Office said that the average premium per person in the individual market would go up by 10 percent to 13 percent because of the health care law, it added that for most, subsidies would push their costs “well below” what they would have been charged in the absence of the law. In its latest report, the CBO says about 80 percent of an estimated 25 million joining the exchanges by 2023 will receive subsidies.
But plans on the individual market will, overall, have much better benefits because of the law than they do now. That’s why the CBO expects premiums on average to go up.
One could glean from the CBO report that plans with the same level of benefits (i.e., good benefits) would cost less on the individual market because of the law than they would have otherwise, but those on the individual market largely don’t have those plans now anyway.
Beyond that, no one is actually going to save money compared with what they’re paying now — the estimates pertain to what premiums will cost in the future compared with what they would have cost without the law. And without the law, premiums would still be going up. FactCheck
