Brett Norman | February 4, 2013 04:44 AM EST | The federal health care law could nearly triple premiums for some young and healthy men, according to a forthcoming survey of insurers that singles out a group that might become a major public opinion battleground in the Obamacare wars.
The survey, fielded by the conservative American Action Forum and made available to POLITICO, found that if the law’s insurance rules were in force, the premium for a relatively bare-bones policy for a 27-year-old male nonsmoker on the individual market would be nearly 190 percent higher.
That isn’t the sticker price many of these individuals would pay, thanks to subsidies offered with the law. But the young men with higher incomes wouldn’t get subsidies, and the warning of a premium price shock for them might become a key exhibit in opponents’ argument that Obamacare won’t save Americans money over the long haul but would rather cost them.
The forecasts in the study are higher than most so far by allies and foes of the Affordable Care Act. But it is likely that some in the group will face increases. That’s because the same new insurance market rules that will make coverage more affordable for older and sicker people will make insurance for young and healthier people more expensive.
Most other studies have tried to estimate average premium increases, which have ranged anywhere from negligible to 85 percent and higher. This survey looks at individual examples in specific markets to show the itemized impact of the major Obamacare reforms.
The insurers estimated that a healthy 27-year-old man in Austin, Texas, who pays $54 a month for insurance this year would have a $153 premium if Obamacare’s market regulations were in effect.
The pressure would be the opposite but more modest for top-tier plans covering an older, unhealthy woman in Austin. Her premium would drop by 40 percent, they estimated.
But the sharp increase for some is going to make it “hard to declare victory,” said Douglas Holtz-Eakin, president of the American Action Forum and a persistent critic of the health law.
The Obama administration should “be very, very, very afraid,” he said. The country was “told it was going to make health care cheaper.”
The survey asked insurers how the market reforms would affect policies for specific individuals and small groups in Chicago, Phoenix, Atlanta, Austin, Milwaukee and Albany.
Four or more insurers answered the questions in all of the cities except Albany. It’s not a scientifically representative sample, but it reflects calculations of companies that provide coverage to most Americans, Holtz-Eakin said.
Supporters of the Affordable Care Act counter: Look at the bigger picture.
The survey looks only at the estimated increase in cost to insurers, not consumers. It does not factor in the subsides that will offset the lion’s share of the premium cost for those who make less than 200 percent of the federal poverty level — about $23,400 in 2011.
And of the 4.8 million people, ages 19 to 29, who bought insurance on the individual market in 2011, more than half made less than that, said Sarah Lueck, senior health policy analyst at the Center on Budget and Policy Priorities.
With the federal subsidy, someone making 150 percent of poverty would pay about $55 per month for a midlevel plan on the health insurance exchanges, which has out-of-pocket cost protections and comprehensive benefits, Lueck said. Coverage would be more robust than the high-deductible plans typically available for that price now, she said.
And most of the 11.2 million uninsured 20-somethings — who insurers would most like to enroll to balance out the risks of older, sicker customers — make less than 200 percent of poverty too, a CBPP analysis found. That means comprehensive insurance will become affordable for them, even if they have pre-existing conditions, Lueck said.
That’s not to say that some young, healthy and better-off people won’t see a substantial increase over premiums they are paying.
The increase will most likely be substantial for “a slice of the younger population,” said Massachusetts Institute of Technology health economist Jon Gruber, a supporter of the health law who has studied its impact on premiums.
And those are the people who, before Obamacare, benefited from insurers’ ability to charge older, sicker people much higher rates — or deny them coverage altogether — practices that have kept premiums for the young low.
Insurers have been reluctant to share their premium projections for a variety of reasons, but Holtz-Eakin, through a lawyer intermediary, was able to get aggregated, anonymous data under a nondisclosure agreement.
On average, premiums for individual policies for young and healthy people and small businesses that employ them would jump 169 percent, the survey found.
But costs would fall for older and less healthy individuals and small groups by 22 percent on average.
The main drivers were the expanded benefits the law requires, a ban on charging older people more than three times more than younger customers, an end to charging women — particularly of child-bearing age — more than men and opening markets to everyone with pre-existing conditions.
Robert Zirkelbach, spokesman for America’s Health Insurance Plans, said the report shows the wide variation of effects the law will have and illustrates the need to pay close attention to affordability.
“It’s important to go beyond simply looking at averages, because that will tell us what it’s going to mean for specific individuals and specific families,” he said.
He says the subsidies will be important to consumers but don’t change the underlying reality. “Subsidies don’t lower premiums any more that Pell Grants lower the cost of college tuition,” he said.
In any case, expect to hear more from Obamacare foes about its impact on premiums for some young, healthy people.
“That’s the one group where the effect will be most obvious and expensive, so that’s a population that they’ll be talking about,” Gruber said. How that “talk” will shape the politics of Obamacare, he said, will depend largely on how the public puts that population in perspective.