Health Insurance Industry Warns of Premium Increases Under Obama's Legislation

Strategic Insights -

President Barack Obama's top domestic priority is facing increasing opposition from the health insurance industry, which is warning of premium increases for people who already have coverage. Democrats and their allies are scrambling to knock down a new industry-funded study by PricewaterhouseCoopers, which projects that Senate legislation will add thousands of dollars to the cost of a typical policy. The study estimates that premiums for a single person will increase by $600 and family coverage by $1,700 in 2013. In 10 years' time, premiums would be $4,000 higher for a family plan and $1,500 more for individual coverage.

Key Takeaways:

  • The health insurance industry is opposing President Obama's legislation, citing concerns over premium increases for people who already have coverage.
  • A PricewaterhouseCoopers study projects that Senate legislation will add $1,700 a year to the cost of family coverage in 2013, and $1,500 more for individual coverage.
  • The study estimates that premiums for a single person will increase by $600 in 2013.
  • In 10 years' time, premiums would be $4,000 higher for a family plan and $1,500 more for individual coverage.
  • The insurance industry is suggesting possibilities such as higher premiums for people who postpone getting coverage, or waiting periods for those who ignore a proposed government requirement to get insurance.
  • The debate is heating up as the Senate Finance Committee prepares to vote on the Baucus bill, which is expected to pass despite industry opposition.
  • Democrats are accusing the insurance industry of "hatchet job" tactics and "politicizing" the issue for corporate gain.

Statistics:

  • $1,700: The estimated increase in the cost of family coverage in 2013 under the Senate legislation.
  • $600: The estimated increase in premiums for a single person in 2013.
  • $4,000: The estimated increase in premiums for a family plan in 10 years' time.
  • $1,500: The estimated increase in premiums for individual coverage in 10 years' time.
  • 10 years: The time frame over which premiums are expected to increase due to the legislation.
  • $829 billion: The total cost of the Baucus bill, a 10-year plan.
  • 2013: The year in which most of the major provisions of the Baucus bill would be in effect.

Sources:

  • "WASHINGTON Insurance companies arenAEt playing nice anymore. Their dire message that health care legislation will drive up premiums for people who already have coverage comes as a warning shot at a crucial point in the debate and threatens President Barack ObamaAEs top domestic priority." - Associated Press Writer Ricardo Alonso-Zaldivar.
  • PricewaterhouseCoopers study, cited in the Associated Press article.
  • White House spokeswoman Linda Douglass, quoted in the Associated Press article.
  • AARPAEs senior policy strategist, John Rother, quoted in the Associated Press article.
  • Senate Finance Committee chairman Max Baucus, quoted in the Associated Press article through his spokesman.
  • Karen Ignagni, president of America's Health Insurance Plans, quoted in the Associated Press article.
  • Sen. Jay Rockefeller, quoted in the Associated Press article.
  • PricewaterhouseCoopers statement, issued late Monday, acknowledging that the firm did not look at the entirety of the legislation.