Wednesday, March 27, 2013

Obamacare to Explode the Cost of Individual Insurance according to Actuaries

Well it seems that Obamacare is going to screw some people up who aren't getting insurance from their employers.

The disparities are striking. By 2017, the estimated increase would be 62 percent for California, about 80 percent for Ohio, more than 20 percent for Florida and 67 percent for Maryland. Much of the reason for the higher claims costs is that sicker people are expected to join the pool, the report said.

The White House counters that this report doesn't take into account certain things:

The administration questions the design of the study, saying it focused only on one piece of the puzzle and ignored cost relief strategies in the law such as tax credits to help people afford premiums and special payments to insurers who attract an outsize share of the sick. The study also doesn't take into account the potential price-cutting effect of competition in new state insurance markets that will go live on Oct. 1, administration officials said.

The problem is that the tax credit won't help certain Americans if their income is too high to receive the credits but can't afford the cost of their premiums nearly doubling. In other words the Middle Class. Also since it is a tax credit the amount will be lagged and only show up in their tax refund. So you have a monthly charge go up by 80% but won't receive your credit until tax time. That would seriously impact consumer spending depending on how much this insurance is jacked up.


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