Another Obamacare lie of the year candidate

1/10/14
 
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from Wall Street Journal,
1/9/14:

Amid rising premiums, the disincentives for the young to sign up are becoming clear.

President Barack Obama won PolitiFact’s 2013 “Lie of The Year” for claiming, that “if you like your health care plan, you can keep it.” Instead of being ashamed, members of his administration appear to have been inspired by the award.

Take the statement by Department of Health and Human Services’ National Press Secretary for Health Care, Joanne Peters. On Jan. 2, the Journal quoted her as saying ObamaCare “is making health insurance more affordable for young adults.”

That assertion is farcical for most young adults forced to buy insurance through the Affordable Care Act’s exchanges. For example, a friend of mine in her early 30s found her premiums roughly four times higher and her deductible nearly half again as large.

The reason is the ObamaCare “Adjusted Community Rating” provision. The adjusted community rating forbids anyone from being charged a premium more than three times anyone else’s. This ratio is called an “age rating band.” Before ObamaCare, 42 states allowed “age rating bands” of 5:1 or more.

That meant if an insurer charged a young, healthy person a $100 a month premium, it could charge an older person up to $500 a month, as actuaries took age, health, lifestyle and risk factors like smoking into consideration.

By narrowing the age rating band to 3:1, ObamaCare incentivizes insurers to raise premiums for younger, healthier people to subsidize premiums paid by older, less-healthy people. So while the insurer can charge $500 for the older person, it must charge the younger person $166 instead of $100.

According to the Kaiser Family Foundation, Americans age 18-34 make up 40% of the potential enrollees for the exchanges. If they decide ObamaCare is a bad deal, then they could make up less than 40% of its enrollees. That could be a disaster for ObamaCare as insurers pay out more this year than what they collect in the premiums, then raise premiums for 2015 to make up for losses. Kaiser predicts that may happen if young Americans comprise one-third of the program’s enrollees, which just might be happening.

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