In Ohio, Obamacare to Increase Individual Insurance Premiums by 55-85%

United States presidential election in Ohio, 2004 (Photo credit: Wikipedia)

With the Presidential election one week away, it’s worth reviewing how Obamacare will impact the residents of key swing states. In Ohio, as elsewhere, Obamacare will drive up the cost of private health coverage, especially for those who buy insurance on their own. A non-partisan study found that, by 2017, individual premiums in Ohio will increase by as much as 85 percent. In addition, Obamacare will deeply cut Medicare Advantage for more than 700,000 Ohio seniors enrolled in the program. And more than 30 percent of Ohio physicians say that they will place new or additional limits on accepting Medicare patients. Read on for more details.

(DISCLOSURE: I am an outside adviser to the Romney campaign on health care issues. The opinions contained herein are mine alone, and do not necessarily correspond to those of the campaign.)

Individual-market premiums to increase by as much as 85 percent

In August of 2011, the Ohio Department of Insurance retained Milliman, the prestigious actuarial consulting firm, to estimate the impact of Obamacare on the private insurance market. Milliman’s 159-page report makes clear that Obamacare’s blizzard of insurance mandates and regulations will dramatically increase the cost of individually-purchased insurance.

By 2017, write the Milliman researchers, “individual health insurance market premiums are estimated to increase by 55% to 85% above current market average rates (excluding the impact of medical inflation).” Because Obamacare forces insurers to cover a buffet of benefits that they don’t have to today, the cost of insurance will go up. Another driver of higher premiums is the fact that insurers will have to cover everyone, regardless of previous health status, a change that will attract sicker enrollees at the expense of healthier ones.

Some Obamacare defenders try to argue that these cost increases don’t matter, because a slice of the low-income population will benefit from the law’s subsidies. But if you’re not eligible for subsidies, or only partially eligible, you will be exposed to the law’s dramatic increases in the cost of insurance. And remember that Obamacare has an individual mandate, which will force most Americans to absorb these higher costs.

Obamacare to cut Medicare by $10,763 per Ohio retiree

Obamacare cuts Medicare by $716 billion between 2013 and 2022 in order to pay for part of the law’s $1.9 trillion in new health-care spending for younger people over the same time frame. My co-blogger Robert Book and Michael Ramlet have published a paper for the University of Minnesota showing that Ohio’s share of those Medicare cuts is $21.2 billion dollars. This year, Ohio has 1,971,260 Medicare enrollees, which means that these cuts amount to $10,763 for every senior in Ohio.

Robert Book published another paper, this time with former White House budget official James Capretta, detailing Obamacare’s cuts to Medicare Advantage on a state-by-state basis. Robert and Jim found that, in 2017, Obamacare will cut $3,390 in Medicare Advantage services for every Ohioan enrolled in the program: a 26 percent cut. And 36 percent of Ohioan seniors—709,313—are enrolled in Medicare Advantage.

Survey: 24 percent of Ohio doctors will stop accepting Medicare patients

Last month, the Physicians Foundation published one of the largest physician surveys ever conducted in the United States, with 13,575 respondents. They asked physicians a broad range of questions, including several about their views on Obamacare. 62 percent of Ohio physicians said that the Affordable Care Act made them “less positive about the direction and future of healthcare in America.” Only 16 percent said it made them feel more positive.

If Medicare fees decrease by ten percent or more—as the Affordable Care Act will require—30 percent of Ohio doctors say that they will place “new or additional limits” on accepting Medicare patients. 24 percent say they’ll stop accepting Medicare patients altogether.

The survey also has bad news for Ohioans on other forms of insurance. 22 percent of Ohio physicians say that they’ll place new or additional limits on Medicaid patients as a result of the Medicare cuts; 22 percent also say they plan to raise fees on those with private insurance in order to compensate for the cuts.

And then there’s Obamacare’s tax increases

Finally, it’s worth touching on Obamacare’s tax increases. From 2013-2022, Obamacare increases taxes by $1.2 trillion, which amounts to $15,796 for the average family of four. Ohio’s share of those taxes is approximately $46 billion.

Obamacare’s defenders will claim that many of Obamacare’s taxes fall on corporations and upper-income individuals. But these taxes will get passed down to every American. For example, the law applies an excise tax to health insurance premiums, which insurers will be forced to pass down to individuals in the form of higher premiums. Analysts estimate that this tax could increase premiums by as much as 3 percent,  amounting to around $500 for the average Ohio family in 2014.

Other state-specific analyses of Obamacare

This is the first in a series of posts I have published on the effect of Obamacare on individual states. The complete series includes Ohio, Wisconsin, Virginia, Florida, Colorado, New Hampshire, Nevada, Minnesota, Iowa, Pennsylvania, and Michigan.

Follow Avik on Twitter at @aviksaroy.

UPDATE: In the comments below, Patrick Paule, an insurance broker in Ohio, says that the huge spike in costs for young people will force many employers to drop coverage or pass on premiums for those making more than $21,000:

Avik, As a broker in Ohio who has read the entire 159 page Milliman report I would add that the bigger issue is in the small employer (2-50 employees) group market where premiums are expected to increase by 150% for younger and healthier groups yet could also have a decrease of 40% for older and unhealthy groups. It is important to note group policy premiums will have significant variability for adjusted community rating.

Smaller employers will observe the greatest impacts since they are more likely to be at one extreme or the other of the total current premium range because of health status tier, age band, and gender.

Why is this most important? Because in Northwest Ohio the average small employer pays 80% of the premiums for single coverage and 65% for family coverage. According the the Kaiser Family Foundation Health Reform Subsidy Calculator, for a single person to get 80% of his/her premiums covered by a subsidy under Obamacare, one’s income would have to be less than $21,000 per year. Our average wages are above that figure.

Simply put, if costs rise for an employer they will do one of two things. Either increase the employees share of premiums or drop their plan. Simple conclusion, if you are employed and making over $21,000 per year plan on seeing your insurance costs increase.