Under the ObamaCare law, health insurance policies must add coverage for pediatric vision, pediatric dental, substance abuse, women’s wellness benefits, and habilitative care. This adds to the cost of kids’ eyeglasses and dental visits because it adds the cost of insurer claims processing, general overhead, and profit to the cost of the item itself. Covering wellness benefits for women makes insurance more expensive for men who don’t get those benefits. People who don’t drink or abuse drugs will have to pay for substance abuse treatment that mostly doesn’t work. We all will have to pay for habilitative care, even though no one is exactly sure what it is.
How much does this overkill cost? In its 2014 filing with the Colorado Department of Insurance, Rocky Mountain Health Plans notes that “annual increases in the cost of health care are expected to continue, since there are not inherent cost controls in the new plan designs,” and reports that it used a two year health care cost increase trend of 16.3 percent. It estimated the cost of the ObamaCare add-ons listed above at $17.93 per member per month. It estimated that ObamaCare taxes and fees, with other licensing fees, add 3.77 percent to the gross premium index rate, slightly over $16 a month. This includes the cost of the Health Insurance Provider Tax, the Exchange Fee, the Patient Centered Outcomes Research Tax, the Risk Adjustment, and the Data Collection Transitional Reinsurance Contribution.
Rocky Mountain Health Plans calculated its gross premium index rate at $437.01 per member per month. Allowable rating factors are applied to this amount to calculate specific premiums. For example, someone 25 years old living in Denver who purchases a Silver HSA policy with a $2,500 deductible would pay approximately ($437.01) times the age factor (1.004), the geographic area rating factor (0.97), and the plan factor (0.706) to arrive at an approximate premium of $300 a month. For this policy, ObamaCare cost increases of almost $34 a month are slightly more than 10 percent of premiums.
For comparison, consider that in 2010 an estimated 25 percent of people went a whole year without any health care expenses at all. The Medical Panel Expenditure Survey estimate suggests that the median per person amount spent on health for people aged 18-44 was just $875 a year. To make a long story short, the ObamaCare plan design and tax increases add up to almost half of annual medical spending for this population.
Thanks to ObamaCare, health coverage is more expensive than ever before. People must buy more coverage than they need, and they must pay for it even if they would be better off using the extra money to retire debt, put food on the table, or put gas in their cars.