Insurance companies will have to pay out an average of 32 percent more for medical claims on individual health policies under President Barack Obama’s overhaul, the nation’s leading group of financial risk analysts has estimated.
That’s likely to increase premiums for at least some Americans buying individual plans.
The report by the Society of Actuaries could turn into a big headache for the Obama administration at a time when many parts of the country remain skeptical about the Affordable Care Act.
While some states will see medical claims costs per person decline, the report concluded the overwhelming majority will see double-digit increases in their individual health insurance markets, where people purchase coverage directly from insurers.
The disparities are striking. By 2017, the estimated increase would be 62 percent for California, about 80 percent for Ohio, more than 20 percent for Florida and 67 percent for Maryland. Much of the reason for the higher claims costs is that sicker people are expected to join the pool, the report said.
The report did not make similar estimates for employer plans, the mainstay for workers and their families. That’s because the primary impact of Obama’s law is on people who don’t have coverage through their jobs.
Like many poor people and the unemployed. The targets of ObamaCare. 🙂
And if you think, well I’m not one of those people so it won’t effect me…
Insurance is a shared pool of risk. Everyone is in the pool and if Barack and Nancy are peeing in the pool you’ll get splashed with it.
Insurance companies uses the “Law of Large Numbers” and probability to determine the chance of an event occurring. If the chance of someone having a car accident is one in one hundred, then insurance companies collect premiums from 100 people to pay the claim that one driver will incur. This is called “spreading the risk”. It is important for insurance companies to adequately gauge the hazards (items that increase the chance of loss) of a risk before insuring it. If they don’t research and know a business or the habits of an individual and they guess wrong in predicting the chance of something happen the insurance company could lose money. If they do this often enough then the company suffers.
Of course it is still up to chance but past experience is a good indicator of the future.
What you don’t understand will hurt you.
The purpose of insurance is to protect against loss. If there is no potential for a loss to occur or if there is potential for the person to profit or gain, insurance usually cannot be purchased.
It is not your personal bank and it is not a stock market and definitely NOT FREE MONEY!!! with no consequences.
While loss of property is certainly serious, an even greater potential for loss
exists when a person or family becomes legally obligated to someone else. The main difference between liability and property loss exposures, is that while the amount of a potential loss to property can rather easily be estimated prior to the loss, the amount of a claim for liability is not determined until after something has happened. Even then, it is difficult to predict what a judge or jury might determine a person must pay to another as compensation for damage or injuries.
Many people fail to recognize one of the most significant loss exposures they face—risk of losing their health and being unable to earn income. One of the biggest assets any person has is their potential earning capacity. If that potential is interrupted by ill health, disability, or death, there is a significant loss, not only to that person, but to others who are dependent upon them.
Property, liability, and human losses can be expensive. In addition to the financial impact, or direct loss, there may also be other costs that are not as obvious.
So now do you want the government bureaucrats involved in your Insurance? 🙂
At a White House briefing on Tuesday, Health and Human Services Secretary Kathleen Sebelius said some of what passes for health insurance today is so skimpy it can’t be compared to the comprehensive coverage available under the law. “Some of these folks have very high catastrophic plans that don’t pay for anything unless you get hit by a bus,” she said. “They’re really mortgage protection, not health insurance.”
See above. Do you think they understand? Do they understand risk management??
A prominent national expert, recently retired Medicare chief actuary Rick Foster, said the report does “a credible job” of estimating potential enrollment and costs under the law, “without trying to tilt the answers in any particular direction.”
Unlike 1-directional Liberals and progressives. 🙂
Kristi Bohn, an actuary who worked on the study, acknowledged it did not attempt to estimate the effect of subsidies, insurer competition and other factors that could mitigate cost increases. She said the goal was to look at the underlying cost of medical care.
“Claims cost is the most important driver of health care premiums,” she said.
The more claims, the more risk, the higher the premium. That’s NOT rocket science.
Oh, and those “subsidies” from government are what? SPENDING. So if the subsidies have to increase to hide the cost then the SPENDING will have to increase. And where does the spending come from?
Tax Payers! 🙂
Congratulations. You get to fun yet another self-bloating bureaucratic nightmare!
Aren’t you happy!!!!
Bohn said the study overall presents a mixed picture.
Millions of now-uninsured people will be covered as the market for directly purchased insurance more than doubles with the help of government subsidies. The study found that market will grow to more than 25 million people. But costs will rise because spending on sicker people and other high-cost groups will overwhelm an influx of younger, healthier people into the program.
Especially, when you are not allowed to manage your risks by Adverse Selection.
Some of the higher-cost cases will come from existing state high-risk insurance pools. Those people will now be able to get coverage in the individual insurance market, since insurance companies will no longer be able to turn them down. Other people will end up buying their own plans because their employers cancel coverage. While some of these individuals might save money for themselves, they will end up raising costs for others. (Yahoo)
But in a Me-Centered Universe isn’t that a win? 🙂
Go Me! It’s all about ME! ME ME! 🙂