Obamacare premiums are going up again. The problem is the insurance market regulations, write Doug Badger and Edmund Haislmaier:
In 2019, Obamacare premiums are poised to become even more expensive. New York, Washington state, and Maryland are requesting to raise their rates for the individual market by an average of 24 percent, 19 percent, and 30 percent respectively. Nationwide, the Congressional Budget Office predicts premiums will increase an average of 15 percent for the Obamacare benchmark plan.
But it doesn’t have to be this way.
Earlier this year, we co-authored a study examining how Obamacare regulations raised premiums. We reviewed dozens of prospective and retrospective actuarial analyses of Obamacare’s premium effects on both the state and national levels.
We found that premium increases for Obamacare policies were attributable to a maze of new federal insurance mandates, combined with a flawed subsidy design. That unhappy concoction produced disproportionately older and less healthy insurance pools, requiring insurers to price policies beyond the reach of many families and small businesses.
Our review of dozens of actuarial analyses found that a cluster of popular Obamacare insurance access requirements – specifically those that required insurers to issue policies to all comers, prohibited medical underwriting (i.e., basing premiums on health status), and required coverage of pre-existing medical conditions – accounted for the largest share of premium increases.
But our study made additional findings, including this: As much as half the increases associated with this complex of regulations could be rolled back if Congress removed certain Obamacare mandates, such as the single risk pool requirement.
We also found that other Obamacare requirements adversely affected premiums. The essential health benefits mandate and the requirement that individual policies provide a minimum actuarial value of 60 percent exerted direct, measurable and substantial effects on premiums.
We further found that regulations requiring insurers to overcharge younger adults had a secondary effect on premiums by producing insurance pools that skew older and sicker.
[Doug Badger and Edmund Haislmaier, “How Congress Can Reduce Obamacare Premiums,” The Daily Signal, July 5]
