Story first appeared in The Detroit News.
week I got news that my health insurance costs are going up. A lot. In
2014 my monthly premium for a family of four will increase 15 percent to
$575, my deductible will double to $3,000 and I will lose my drug
coverage, adding another $100 a month to my expenses. My story is
typical for employees of Gannett, the Detroit News' parent company, and
other businesses across the country.
Obamacare is not just
creating havoc in state exchanges, it is roiling the larger private
health insurance market. Costs are skyrocketing thanks to the expensive
mandates, regulations and taxes buried in the Affordable Car Act.
Call it the Unaffordable Care Act.
by President Barack Obama as a historic reform that would reduce heath
insurance costs by $2,500 a year and cover 40 million uninsured, the
program is dictating terms to every health insurer while offering
employees a grim choice of rising costs with their company plan or
seeking refuge in unworkable, expensive government-run state exchanges.
many small employers have welcomed a delay in the ACA's employer
mandate until 2015, businesses that already provide insurance are facing
Obamacare's new reality. The bad news has come in waves as companies
like Home Depot and Trader Joe's announced they are dropping coverage
for part-time employees. Hundreds of thousands of consumers are losing
their "mini-med plans" because they don't meet Washington's minimum
requirements. Now come the premium increases for self-insured businesses
that an analysis by Duke University's Center for Health Policy
estimates will cost an average family $800 a year. In Michigan, for
example, insurance costs for the Extreme Chrysler dealership in Jackson
are going up 70 percent and Michigan Group Benefits insurance says its
clients' average increase is 23 percent.
The $2,100 cost jump in
my Gannett plan, administered by United Health, is actually worse than
it appears, as my premiums have already swelled by 45 percent since 2011
as insurers anticipated federal regs forcing, for example, coverage of
dependents up to 26 years old. Gannett must also swallow a $63 tax for
each individual in its group plan and another $2.13 fee per head to
"study heath care outcomes." Similar costs threaten private,
union-negotiated health plans, leading Teamsters President Jimmy Hoffa
to say Obamacare will "destroy the very health and well being of our
"Health care costs historically have been going up 7
percent a year, so anything above that is probably due to provisions in
Obamacare," concludes Drew Gonshorowski, a policy analyst for the
Heritage Foundation's Center for Analysis, who says the ACA's
over-regulation is upsetting important insurance calculations like
"age-brand compression" that balances risk pools.
pricing is one of the most complicated, difficult-to-price markets," he
says. "The ACA doesn't allow insurers to price freely."
promises that its state exchanges offer insurance options, but the
government-run system is dysfunctional. Three weeks after its launch,
the federally run Michigan Health Care Exchange is still a nightmare. In
the first two weeks I couldn't sign up because the three security
questions wouldn't load. Last week, the security questions were finally
there, but then I stalled at the next page. After waiting in a chat
room, an Obamacare assistant finally responded: "Unfortunately, (high
volume) is causing some glitches for some people trying to create
accounts, log in, and complete their application. Keep trying and thanks
for your patience."
But if/when if I do get in, more sticker shock awaits.
analysis of the feds' own data by Heritage's Gonshorowski finds
Michigan consumers (as in most states) will experience cost increases
across the board. For a family of four, the state exchange will increase
costs from $771 to $864 per month. Even for a 27-year old, the youth
demographic on which exchanges depend to subsidize older applicants, the
exchange increase costs from $117 to $255 per month, a 118 percent
"The essence of the law is working," said the president at
his Monday news conference. "The prices are lower than we expected, the
choice is greater than we expected." Do you believe him or your lying
Henry Payne's column runs every Tuesday online. Payne is a
Detroit News editorial writer and editorial cartoonist. He also is
editor of The Detroit News Politics forum.