The Next Shoe To Drop: Obamacare Will Increase The Cost Of Employer-Sponsored Insurance

Yesterday, the Obama Administration’s Centers for Medicare and Medicaid Services released a six-page report predicting that Obamacare could cause premiums to increase for nearly two-thirds of small- to medium-sized businesses. “This results in roughly 11 million individuals whose premiums are estimated to be higher as a result of the ACA and about 6 million individuals who are estimated to have lower premiums,” CMS writes. But CMS’ projections almost certainly understate the problem, one that will begin to affect millions of workers in the second half of 2014.

CMS: 11 million will see increased premiums

The CMS premium report was a requirement imposed by Congress on the administration under the Department of Defense and Full-Year Continuing Appropriations Act of 2011. That law mandated that CMS “provide an estimate of the number individuals and families who will experience a premium increase and the number who will see a decrease” as a result of the Affordable Care Act.

But CMS only looked at one cost-increasing Obamacare provision:community rating. And they only looked at it for individuals employed by businesses with less than 100 employees: what’s called the “small group market.”

Here’s the background. Under Obamacare, all regulated insurance plans are required to charge people the same premium, regardless of health status. Insurers can charge different rates based on age (but only within a narrow range); tobacco use (smokers can be charged 50 percent more than non-smokers); geographic area (insurers can charge people different rates based on regional demographic variation); and whether the plan is for a single individual or a family.

Via: Forbes

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