Posted 03/29/2012 02:58 PM ET
The Obama administration told the Supreme Court this week that the Affordable Care Act's mandate that everyone buy insurance is vital to providing universal coverage and lower insurance costs. But ObamaCare won't solve either problem, as government reports show.
Despite the mandate, there will still be 27 million uninsured a decade from now, according to the Congressional Budget Office. The promised uninsured rate — 10% in 2022 — isn't much better than in 1980, when it was 12%, according to the National Center for Health Statistics.
The law also tries to cut the uninsured population by making it illegal for insurers to deny coverage because of preexisting conditions, called "guaranteed issue.
But fewer than 4% cited poor health as a reason for not getting coverage, according to the CBO. Meanwhile, 71% cited the high cost of premiums.
To the extent that poor health puts insurance premiums out of reach, ObamaCare's "community rating" reform could help, since it bars insurance companies from basing premiums on health status. Nevertheless, it will still leave millions without coverage.
Premiums Won't Come Down
The administration also told the Court that the individual mandate will cut insurance costs by eliminating cost-shifting — where uninsured force others to pay for their care. But it appears that, even if the law does reduce cost shifting, the mandate will not result in lower premiums.
A number of reports suggest that, at best, the Affordable Care Act will keep premiums the same, while others say it could actually push them higher than they would otherwise be.
A recent CBO report, for example, says that premiums over the next 10 years will rise at a faster rate than they have for the past five.
A previous CBO analysis found that average premiums in the individual insurance market would be "about 10% to 13% higher in 2016" as a result of the law. Premiums for small businesses could go up 1%, and large group plans would likely see no change.
A study done for Wisconsin — which the Daily Caller reports was put together by one of the architects of the law — found that "the majority of individuals in the non-group market will pay more in premiums for health insurance in 2016 than they do today," with the average increase at 30%. Even after including the law's tax credits, more than half would see premium costs go up.
A study of the Massachusetts reform, which like Obama's includes guaranteed issue, community rating and an individual mandate, found that employer-sponsored premiums climbed faster after the law was implemented.
One issue contributing to these results is that expanding coverage will also increase health care demand.
"Numerous studies have demonstrated that individuals and families with health insurance use more health services than otherwise-similar persons without insurance," noted Richard Foster, the chief actuary for the Centers for Medicare and Medicaid Services.
His office expects that health spending in 2014 — the first year that ObamaCare will be fully in effect — will shoot up 8.3%, largely because of the law's expanded coverage provisions.
And a Rand Corp. study found that the law will boost national health spending in 2016 by 3% over what would be the case without it.
"If anything, the Affordable Care Act doubles down on many of the worst aspects of our current system," argues Paul Howard, the director of the Manhattan Institute's Center for Medical Progress.
Despite the mandate, there will still be 27 million uninsured a decade from now, according to the Congressional Budget Office. The promised uninsured rate — 10% in 2022 — isn't much better than in 1980, when it was 12%, according to the National Center for Health Statistics.
The law also tries to cut the uninsured population by making it illegal for insurers to deny coverage because of preexisting conditions, called "guaranteed issue.
But fewer than 4% cited poor health as a reason for not getting coverage, according to the CBO. Meanwhile, 71% cited the high cost of premiums.
To the extent that poor health puts insurance premiums out of reach, ObamaCare's "community rating" reform could help, since it bars insurance companies from basing premiums on health status. Nevertheless, it will still leave millions without coverage.
Premiums Won't Come Down
The administration also told the Court that the individual mandate will cut insurance costs by eliminating cost-shifting — where uninsured force others to pay for their care. But it appears that, even if the law does reduce cost shifting, the mandate will not result in lower premiums.
A number of reports suggest that, at best, the Affordable Care Act will keep premiums the same, while others say it could actually push them higher than they would otherwise be.
A recent CBO report, for example, says that premiums over the next 10 years will rise at a faster rate than they have for the past five.
A previous CBO analysis found that average premiums in the individual insurance market would be "about 10% to 13% higher in 2016" as a result of the law. Premiums for small businesses could go up 1%, and large group plans would likely see no change.
A study done for Wisconsin — which the Daily Caller reports was put together by one of the architects of the law — found that "the majority of individuals in the non-group market will pay more in premiums for health insurance in 2016 than they do today," with the average increase at 30%. Even after including the law's tax credits, more than half would see premium costs go up.
A study of the Massachusetts reform, which like Obama's includes guaranteed issue, community rating and an individual mandate, found that employer-sponsored premiums climbed faster after the law was implemented.
One issue contributing to these results is that expanding coverage will also increase health care demand.
"Numerous studies have demonstrated that individuals and families with health insurance use more health services than otherwise-similar persons without insurance," noted Richard Foster, the chief actuary for the Centers for Medicare and Medicaid Services.
His office expects that health spending in 2014 — the first year that ObamaCare will be fully in effect — will shoot up 8.3%, largely because of the law's expanded coverage provisions.
And a Rand Corp. study found that the law will boost national health spending in 2016 by 3% over what would be the case without it.
"If anything, the Affordable Care Act doubles down on many of the worst aspects of our current system," argues Paul Howard, the director of the Manhattan Institute's Center for Medical Progress.
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