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Obamacare Launch Will be Ugly

September 30, 2013 in Economics

By Michael D. Tanner

Michael D. Tanner

ObamaCare officially opens for business Tuesday. Unfortunately, it’s already falling short of promise.

The plan:
Tomorrow, Americans are supposed to be able to start purchasing insurance through “exchanges” — government-managed state marketplaces for health insurance.

Individuals lacking access to “affordable” insurance are eligible to buy through the exchange. Those with incomes up to about 400 percent of the poverty level ($94,200 for a family of four) could be eligible for subsidies. At least 7 million Americans are expected to buy insurance through the exchange by Jan. 1.

Millions of Americans are about to find out exactly what Obamacare means for them. They’re not likely to be pleased.”

‘Success’:
The key words on enrollment are “at least.” Given how fast companies are dropping insurance for their workers and pushing them into the exchanges — Home Depot, for one, just announced it’s dropping coverage for 30,000 part-time workers — millions more Americans are likely to be left with no choice for insurance except the exchange.

Higher prices:
Premiums will vary widely depending on where you live. In a few places like New York City, which have long suffered from dysfunctional insurance markets, some people may pay a bit less than before, especially those getting subsidies. But elsewhere — upstate, for example — many will pay considerably more.

Yes, the federal Health and Human Services Department recently said ObamaCare premiums are “lower than expected,” but that “expected” means Congressional Budget Offices projections — which were that insurance costs would rise.

Comparing the data from that HHS release with current premiums, one study found that a young person would face an average increase of roughly 76 percent, while a 40-year-old would see an average increase of 80 percent.

In another study, National Journal — not generally known as part of the vast right-wing conspiracy — found that, even after accounting for subsidies, most Americans will pay more in premiums for ObamaCare plans than they do for their employee plans today.

And out-of-pocket costs — deductibles, copayments, co-insurance — are all likely to be higher for exchange-based plans. A study by Avalere Health found that ObamaCare’s “affordable” bronze plans had an average deductible of $5,150, more than four times higher than the average deductible in employer-sponsored coverage this year.

By one estimate, all the added costs for the average family of four over the next eight years add up to an extra $7,450 due to ObamaCare.

Fewer choices:<br …read more

Source: OP-EDS

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