Why Today’s House Vote Could Mean Higher Insurance Premiums
Today, the U.S. House of Representatives is voting to delay the Affordable Care Act’s individual responsibility provision. Coincidentally, this is happening on the same day that the New York Times is reporting that New York’s insurance rates for 2014 are AT LEAST 50% lower than current rates. An individual living in New York City who currently pays $1000 a month for health insurance will see their rate decrease to just $308 a month. And that’s even BEFORE factoring in new federal subsidies that will help individuals cover a portion of their premium costs.
It’s pretty obvious that lower rates are good news for all New Yorkers, particularly women who have a harder time affording health care and are more likely than men to avoid needed health care services because of cost, but this news should also convince the House to vote down the effort to delay the individual responsibility provision.
That’s because when more people buy into the system, rates go down. This is supported by evidence out of Massachusetts. In 2006, Massachusetts enacted a health reform law similar to the Affordable Care Act that gradually phased in a mandate for individuals to buy insurance. The results? As economist Jonathan Gruber explains, “The average individual premium in the state fell from $8,537 at the end of 2006 to $5,143 in mid-2009, a 40 percent reduction, while the rest of the nation was seeing a 14 percent increase.”
The Affordable Care Act contains a mandate similar to the one enacted in Massachusetts. This provision, along with New York’s implementation of health exchanges that foster competition and allow consumers to easily shop for and purchase health insurance, means that New Yorkers who purchase coverage on the individual market will see drastically lower rates when they go to purchase health coverage for next year. If the House were to delay the implementation of the ACA’s individual responsibility provision, it would mean delayed access to these more affordable premiums. And that’s something we just can’t afford.
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