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November 18, 2016

How Obamacare Has Hurt Children

by Merrill Matthews, Beverly Gossage | In The News | Op/Ed
  The Hill

President–elect Donald Trump has indicated he wants to keep the ObamaCare provision that allows children to remain on their parents’ health insurance policy until the age of 26.  And he’s not alone, a number of Republicans have also expressed support. 

More than any other group, children have been adversely affected by the Affordable Care Act’s draconian premium increases, which have at least tripled thanks to Obamacare. 

Children between the ages of two and 18 are the healthiest segment of the population.  When they were underwritten—i.e., charged a premium based on their risk—their premiums were very low.   

In 2009, the year before ObamaCare became law, one major health insurer offered a popular individual policy for Kansas children with a $5,000 deductible (100% coinsurance after meeting the deductible, plus free wellness exams and immunizations) for between $28 and $68 per month, depending on the gender and age of the child (between 2-20) averaging  $40. A child in his or her first year cost $98. 

That same carrier’s premium in 2016 for a comparable ObamaCare plan with a $6,450 deductible costs $124 per month for each child up to age 20.   

Thus, a family could pay for all three children (about $120) in 2009 for less than they could insure one in 2016. 

One reason for the spike is ObamaCare’s mandate that health insurance cover “children” up to the age of 26.  Prior to Obamacare, most standard policies allowed children to remain on their parents’ policy in their early 20s as long as they were dependents, usually students in school.   

But under ObamaCare a woman 25 or less can be married, working and living away from home and still be covered by her parents.  In short, children’s health insurance was never intended to cover adult women well into their childbearing years.  In the plan comparisons cited earlier, her premium in 2009 was $81 ($48 for males) and jumped to nearly $200 in 2016. 

In addition, ObamaCare imposes “modified community rating,” which means young and healthy people are charged more so that older and sicker people can be charged less. 

Historically, children were charged low rates and few were declined coverage due to preexisting conditions, because carriers accepted infants at standard rates regardless of health conditions, if the child was added to a policy within 30 days of birth. But if a child remained uninsured and developed severe health conditions, that child, like uninsured adults with high risk conditions, would be offered at least one guaranteed plan due to a 1996 law. In 35 states that coverage was available through a state-run high-risk-pool. 

Liberals complained that risk pools charged higher prices than standard policies.  In 2009 a child’s plan with a $5,000 deductible on the Kansas high-risk pool was $151 monthly—a little more than the standard rate of $124 in the 2016 plan.  And only a handful of families paid that high-risk pool premium, but every family pays higher children’s premiums under ObamaCare. 

Of course, the 2009 and 2016 policies aren’t exact matches.  The 2016 policy’s deductible is $1,450 more than the 2009 policy. Plus, health insurers have taken a number of mostly unpopular steps—such as greatly limiting the network of doctors—to minimize increases, or today’s premiums would be even higher. 

One could argue that the higher 2016 premiums are due to ObamaCare’s new health benefits and health care inflation.  But Mr. Obama rejects that argument, telling students at Miami Dade College that it’s employers and insurer that were pushing up premiums and deductibles. “It’s not because of any policy of the Affordable Care Act that the rates are going up.”  And he said, “This law has actually slowed down the pace of health care inflation.” 

Young families with several children can least afford the premium spikes, and families must choose an even more expensive 2017 plan with an average increase of 39%.  Maybe that’s why so many younger people have decided not to join Obamacare. 

Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Beverly Gossage is an independent health insurance agent, owner of HSA Benefits Consulting and past president of the KC NAHU chapter.


 

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