By Mary Taylor
Ohio Lt. Gov. and Insurance Director
Since it was signed into law in March 2010, the Patient Protection and Affordable Care Act, also known as Obamacare, has been the subject of intense debate. Both sides on this issue argue over its impact and what it truly means for consumers and health care in general. Now, thanks to an in-depth analysis of the law’s many provisions affecting Ohio, there is no doubt Obamacare will have a significant negative impact to our state and other states as well.
Earlier this year, as the Director of the Ohio Department of Insurance, I hired an independent consultant, Milliman, Inc., to review the requirements and mandates of Obamacare to determine its impact for Ohioans. They spent several months researching Ohio’s insurance market and laws to assess what our state will look like in 2014 and beyond.
The bottom line – health insurance premiums for individuals in Ohio will increase anywhere from 55 to 85 percent on average (not including current medical trends that are averaging 7 to 8 percent nationwide). Moreover, some Ohioans – depending on their current health status – may see their premiums increase by as much as 90 to 130 percent. These historic spikes in cost will hurt consumers at a time when health insurance is already going up.
In addition to significantly increasing premiums for individuals, the small group market will see extraordinary shifts and fluctuations. Even though overall increases in this market will be held to 5 to 15 percent (not including yearly medical trend), and some small groups will see decreases by as much as 40 percent, they will be subsidized by other small groups that could see premiums jump by as much as 150 percent depending on their current group health status.
As a CPA, I have no doubt these substantial changes will force many employers to drop coverage altogether because it is simply unaffordable and too unpredictable. This will result in more Ohioans moving into a government-subsidized program costing all taxpayers more money to pay for the health insurance subsidies for those that were previously covered by their employers.
The study also provides estimates for growth in Ohio’s Medicaid program because of changes mandated in Obamacare. These requirements are going to push more than 1 million people into Medicaid and potentially another 500,000 into the government-subsidized exchanges. When you add it all up, it’s possible that half of all Ohioans will receive some type of health coverage through a taxpayer-subsidized program once the law is fully implemented.
Advocates for the law would argue that even with the increase in premiums, insurance will still be more affordable because of the government subsidies provided in Obamacare. They would have you believe that while premiums will skyrocket, it doesn’t matter because the government will pay for substantial portions of the cost for many consumers. The truth is we do need to address the shortcomings in our current system, but our country cannot continue to spend at unprecedented and unsustainable levels.
There is a staggering price for every American attached to providing “free” or subsidized health care coverage. At a time when our country is $14 trillion in debt and when states are making hard choices to balance their budgets, this law is going to cause an explosion in health care spending never before seen. The federal government’s own actuary has predicted that government health care costs will represent 50 percent of all national health expenditures by 2020 and that health care spending in total will represent 20 percent of national GDP in that same year. This is unacceptable.
Handcuffing states with Obamacare’s one-size-fits-all approach is not the reform we need. Ohioans and Americans deserve a consumer-driven, market-based approach that is transparent and truly accountable for the cost and quality of healthcare – not a government-knows-best set of mandates.
Mary Taylor is Ohio’s 65th Lieutenant Governor. She was sworn into office on January 10, 2011, the same day Governor John R. Kasich named her to serve as the director of the Ohio Department of Insurance and to lead CSI Ohio: The Common Sense Initiative to reform Ohio’s regulatory policies. She is the only Certified Public Accountant elected to any state office in Ohio’s 208-year history.
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Obamacare is so complex that only a few of its impacts have been widely publicized. In fact, many of the law’s far reaching mandates and requirements are still being defined by Washington bureaucrats. But as you look closer at some of its lesser known provisions, one thing becomes clear: the authors of Obamacare are more concerned with a government takeover of health care and less worried about you the consumer and the increasing cost of health insurance because of this law’s mandates. Here are just three of the major market changes – among many – that all Ohioans should understand.
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