WASHINGTON, D.C. – A report from the Society of Actuaries offers the sobering reality of where health care costs are headed under Obamacare over the next four years. According to the report, insurers will pay on average 32 percent more on individual health policies and will most likely pass that cost on to the consumers of those policies.
Actuaries use statistics and economic theory to make long-range cost projections for insurance and pension programs sponsored by businesses and government.
A few areas will likely see lower medical claims cost, but the majority of states are set to see double-digit increases. By 2017, increases are predicted to be 62 percent for California, about 80 percent in Ohio and Wisconsin, more than 20 percent for Florida and 67 percent for Maryland.
States that will show significant increases include:
- Idaho – 62%
- Wisconsin – 80%
- California 62%
- Indiana – 68%
- Ohio – 80%
- Maryland – 67%
Retired Medicare chief actuary Rick Foster said the report does “a credible job” of estimating potential enrollment and costs under the law, “without trying to tilt the answers in any particular direction.” Foster added, “actuaries tend to be financially conservative, so the various assumptions might be more inclined to consider what might go wrong than to anticipate that everything will work beautifully.”
Deputy Press Secretary Josh Earnest raised questions about the merits of the study at Wednesday’s White House press briefing. “I think that you’re citing a study that I believe was conducted by a health insurance company that’s critical of the Affordable Care Act,” Earnest said. “So that part I’m not particularly surprised about.”
In response to the White House criticism, the SOA issued the following:
The report was commissioned, paid for and overseen by the Society of Actuaries, the organization that credentials health actuaries. The analysis used a model that has been in use for more than 20 years by such organizations as the Pepper Commission and the Clinton Administration. The study was overseen by a project oversight group comprised of Society of Actuary members and its findings were exposed to the organization’s membership for review and comment.
Uncertainty over costs has been a major concern since the law passed and remains so months before a major push to cover the uninsured gets rolling October 1. Middle-class households will be able to purchase subsidized private insurance in new marketplaces, while low-income people will be directed toward Medicaid and other safety net programs.
The president has pledged that the new law will bring costs down, but that seems like a stretch now. Like the bill itself, which practically no one has actually read in its entirety, the future of health care costs and service is wrapped in a fog of uncertainty.