Health Reform Will Increase the Cost of Health Insurance Coverage

“There ain’t no such thing as a free lunch,” is often stated by economists. This report from America’s Health Insurance Plans/PricewaterhouseCoopers entitled Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage finds that requiring health insurers to take on high risk insured with preexisting conditions will raise premiums.

Key Findings

• Health reform could have a significant impact on the cost of private health insurance
  coverage.
• There are four provisions included in the Senate Finance Committee proposal that could increase private health insurance premiums above the levels projected under current law:
         o Insurance market reforms coupled with a weak coverage requirement,
         o A new tax on high-cost health care plans,
         o Cost-shifting as a result of cuts to Medicare, and
         o New taxes on several health care sectors.
• The overall impact of these provisions will be to increase the cost of private insurance coverage for individuals, families, and businesses above what these costs would be in the absence of reform.
• On average, the cost of private health insurance coverage will increase:
       o 26 percent between 2009 and 2013 under the current system and by 40 percent during this same period if these four provisions are implemented.
       o 50 percent between 2009 and 2016 under the current system and by 73 percent during this same period if these four provisions are implemented.
        o 79 percent between 2009 and 2019 under the current system and by 111 percent during this same period if these four provisions are implemented.

Read report.