A recent article by Forbes features the Manhattan Institute research surrounding the impact that the Affordable Care Act (“Obamacare”) will have on future health insurance premiums across the country. This comprehensive survey of 49 states conducted an analysis on premiums under Obamacare for people who are shopping on their own in the individual marketplace for coverage. The research shows that Obamacare is expected to increase premiums, on average, by 41% as compared to a recent report that put the increase at only 24%. The steepest hikes will be imposed on the healthy, the young and males.
On the other hand, older Americans that are nearing retirement are expected to receive the biggest benefit from the new Act through heavy subsidies from younger individuals. One key feature of Obamacare is that insurers are only allowed to charge their oldest customers three times the amount they charge younger customers. This rule has driven up the cost of insurance for young people because 64-year-olds consume, on average, six times as much health care services as 19-year-olds, according the the Forbes article. Additionally, the subsidies increase in proportion to the percentage of your income that is tied up in health insurance. This means that for elderly people whose premiums are higher, the subsidies are higher as well.
When surveying the impact on individual states, there are eight states that will enjoy an average premium reduction under Obamacare (NY, CO, OH, MA, NJ, NH, RI, and IN). The remaining 41 states, plus Washington D.C. will experience premium hikes beginning next year under the new Act (the largest hike being Nevada at 179%) .
To read the full Forbes article, click here.