Affordable Care Act to Raise Premiums in
Affordable Care Act will increase the average cost of insurance premiums, making
health care less affordable for those Texans on whom the system financially
depends, according to a report from a conservative think tank.
released Monday by the Texas Public Policy
Foundation, says premiums for health insurance plans will increase for young,
healthy Texans under the Affordable Care Act, also known as Obamacare. The
health care law requires private insurers to cover essential health benefits and
establishes a federal marketplace for insurers to sell coverage plans, among
concludes that premiums will be on average "significantly higher than coverage
available on the individual market in
prior to the ACA." Nonetheless, it concedes that comparing pre- and post-ACA
health care plans “presents some difficulties” because of the costs associated
with mandating that health plans cover essential benefits, and because the
impact on individuals will vary depending on age, gender, location and other
As an example,
the report highlights changes in premiums for catastrophic plans for young
people living in metropolitan areas. Catastrophic plans have lower premiums than
comprehensive plans but provide protection only from worst-case scenarios. John
Davidson, the report’s author, said those plans are the most attractive to
young, healthy Texans, and that they operate “the most like insurance” of any
health care plan in the insurance marketplace.
27-year-old, non-smoking male in Austin, low-cost catastrophic plans on the
exchange, which are available only to those under 30 or those with low incomes
who qualify, will be on average 84 percent more expensive than pre-ACA
catastrophic plans,” the report found.
the health care law, however, say the comparisons are misleading.
Stacey Pogue, a
senior policy analyst for the left-leaning Center for Public Policy Priorities,
says the pre-ACA premiums — what she calls “teaser rates” — analyzed in the
report do not reflect average rates paid on the individual market. “These are
the advertised rates by insurers,” she said. “Some young, healthy people get the
teaser rate, but certainly not everybody does. To represent that as the average
rate is misleading."
the term "teaser rate," preferring "listed rate." "Rather than just take the
lowest one that was advertised, we averaged the three lowest ones we could find
to come up with an average picture of the low-cost catastrophic rates in Texas," he said.
under the Affordable Care Act are more comprehensive, Pogue said. They cover
more medical services, including pre-existing conditions, and have lower
out-of-pocket maximum costs. On the other hand, the pre-ACA insurance market is
one “where the policies you can buy are full of holes, whether it’s mental
health coverage or out-of-pocket costs that can be up to $13,000 a year,” Pogue
that policies will change under the ACA, and he attributes their higher costs to
those changes. "It's precisely because of the changes in the plans that they're
more expensive," he said. "And they're most expensive for the people who had the
ability to get the cheapest insurance before the ACA."
government will offer relief for some facing higher costs in the marketplace.
Texans with incomes between 100 and 400 percent of the federal poverty threshold
will qualify for subsidies to offset higher health insurance premiums. Texans
below the federal poverty line will not qualify for those subsidies and are
instead encouraged to apply for Medicaid, although many will not qualify for
Medicaid either. Gov. Rick Perry and the
Legislature did not to expand the program to cover impoverished adults, with
many citing concerns about a system they say is not efficient.
The TPPF report
says many Texans in their late 20s and early 30s will not qualify for subsidies
because their incomes are too high. “Young, working Texans are most likely to
bear the brunt of these higher costs,” the report says. “Premiums for
ACA-compliant plans for Texans in their late 20s and early 30s are significantly
higher than pre-ACA plans currently on the individual market.” The report says
that those individuals have little incentive to follow the ACA mandate that they
enroll in an insurance plan, and predicts that many will instead opt to pay a
fine rather than sign up for a plan.
officials say the exchange system under the ACA will depend on having a broad
participant base, not just the elderly and afflicted.
“The success of
the program is really contingent on young, healthy adults being able to broaden
the risk pool and pay premiums to allow them to be more affordable for the
older, sicker populations,” said David Gonzales, executive director of the Texas
Association of Health Plans.
But Gonzales was
hesitant to draw comparisons between pre- and post-ACA coverage. Asked whether
rates had gone up, he said, “Unless you’re comparing apples and apples, it’s
hard to really know.”
This article originally appeared in The
Texas Tribune at