Health insurance premiums under Obamacare were promised to drop $2,500 according to President Obama. However, the 2015 premiums for Obamacare plans offered on the “Health Insurance Exchanges” are skyrocketing in Florida and in much of the nation. The Kaiser Family Foundation has analyzed the premiums changes and found that in Florida, the insurance premiums will increase 1-10%. In Pinellas county, the average premium increase will be over 10%. The rates are for the second highest tier of plan, the Silver plan. Bronze plan rates (the lowest coverage) will increase even more profoundly, up 12.9% in Miami for instance.
Premiums are increasing in Obamcare for several reasons. Through the method called “community rating, rates are adjusted to serve the “community” rather than the individual. Thus a younger and healthier person is expected to pay a higher premium, than an older or sicker patient to soften the impact of insurance premiums on others. This is a straightforward wealth transfer from the younger and healthier to others whose premiums would be naturally higher in a true free market. In addition, hospitals are consolidating to form monopolies and buying up physician practices. This creates pressure in the market to drive costs up as competition goes down. The federal government tries to soften the blow on those mandated to buy health insurance buy offering “subsidies” (basically a government check to the insurance company) to pay part of the cost of the insurance. This is another wealth transfer from the taxpayers to the insured. It is also a wealth transfer from our children and future generations since the government borrows money to pay subsidies to the insurance companies. This devalues the dollar as the money is not truly borrowed, but merely printed by the Federal reserve. Certainly, these actions are not serving the Common Good.
True market based health care reform would drive down costs for all, increase the rate of purchase of insurance with true value as well as access to care.