Another massive lie told by President Obama about his signature legislation is that it will save families up to $2500 in premiums on an annual basis. Now, anyone who knows anything about insurance knew immediately that statement was preposterous. It’s basic economics- if you force insurance companies to take on a whole slew of very sick people who will file very expensive claims over the next few years, the only action the insurers can take in order to stay in business is to jack up the premiums of all their existing policyholders and new applicants. Some of the authors know this and want this to happen to put private insurance companies out of business. The rest of the authors are political hacks who have never had a real job, so they didn’t know this.
Yesterday the Heritage Foundation published a study that showed exactly what everyone with one shed of common sense knew all along. Here is a state by state table of premium changes. It’s broken down into a single person, aged 27, a single person, aged 50, and a family of four. Here it is. Click on the table to see a bigger version of it.
If you are a family of four, your premium goes up, but you are really screwed if you are young and single. Even if you are 50 and single, you are not faring well. Again, this is because insurance companies are going to need extra money to be able to cover the claims of all the sick people the federal government is forcing them to put onto their rolls. And, this is where the very real possibility of the death spiral comes into play. Think about it. If you are a healthy 27 year old living in Virginia, are you going to pay nearly $7000 a year for a policy, or go without it and pay a $250 fine? I know what I’d be doing. Unless a young person is already sick, there is absolutely no reason for them to purchase health insurance. That spells disaster.
In addition to a larger version of the table, you can read a summary of their findings here.