Obamacare costing more than previously expected

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Ever since President Barack Obama promised to “cut the cost of a typical family’s premium by up to $2,500 a year,” discussion has focused on how much more health insurance costs.

It’s easy to understand why. In the 12 months between February of last year and this February, premiums for individual and family policies rose more than in the eight years preceding combined, according to eHealth Insurance.

In the first 3 months of 2014, premiums rose 12 percent for individual policies, 11 percent for small group policies, according to Morgan Stanley’s quarterly survey of insurance brokers. If premiums rise at the same rate for the rest of the year, individual policies would go up 48 percent in 2014; small group policies 44 percent.

Premiums for large group policies will rise between 15 percent and 20 percent this year, United Health Care estimated.

About 70 percent of Americans with private health insurance are covered by large group policies; 13 percent by small group policies.

Individual policies have increased most in California (53 percent), New Hampshire (90 percent), and Delaware (100 percent). The biggest increases in small group premiums were 66 percent in Pennsylvania, 588 percent in Washington state.

Our focus on the hardships Obamacare has imposed on many families obscures how badly the taxpayers are getting hosed.

Obamacare will cost them $36 billion this year; $1.383 trillion for the decade beginning in 2015, the Congressional Budget Office estimated in April. The number of Americans without health insurance will fall from 42 million in 2014 to 31 million by the end of 2024, CBO estimated.

Journalists noted this is $5 billion less for this year than CBO had estimated in February; $104 billion less for the following decade. They missed the bigger story. According to CBO’s numbers, for each additional person who gains health insurance, Obamacare will cost taxpayers $45,461.

Let’s put that number in perspective. Total spending on health care, public and private, averaged $8,402 per person in 2010. Federal and state governments combined spent $5,563 for each Medicaid recipient. Americans under age 65 with private insurance spent, on average, $3,840 on health care.

According to CBO, just to provide health insurance (not health care) to 12 million people who don’t have it now, we’ll spend roughly eight times as much, per capita, as was spent on health care for Medicaid recipients the year Obamacare was enacted; about 15 times as much as what the average American under age 65 spend on health care that year.

And many experts think CBO overestimates the number of Americans who’ll gain health insurance because of Obamacare and underestimates the cost to taxpayers of providing it.

More than $4.7 billion has been spent just to set up health care exchanges in 16 states and the District of Columbia. Through March, the average cost per enrollee on those exchanges was $6,895, CNBC calculated. That’s more than what the average American under age 65 will spend on health care this year.

Only about 2.04 million people have been enrolled on those exchanges. Not much bang for a ton of bucks.

Providing health insurance to those who don’t have it is a worthwhile goal, most Americans think. But Obamacare will provide it to only about 25 percent of those who lack it now. So much money for so little good.

Jack Kelly writes for The Blade of Toledo and The Pittsburgh Press. He can be reached at jkelly@post-gazette.com.


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