New York has, for 20 years now, been a long-running experiment in what happens to universal coverage without an individual mandate. —Sarah Kliff
NEW YORK — Excitement of the news today that New York state health insurance premiums may fall under Obamacare was somewhat tempered by the observation that New York has already among the highest individual premiums in the country — due to a structural imbalance that Obamacare corrects.
The New York Times reported that “individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly.”
But there is nothing shocking about the numbers, Sarah Kliff reports at the Washington Post: "A lot of it seems to trace back to a law passed in 1993, which required insurance plans to accept all applicants, regardless of how sick or healthy they were. That law did not, however, require everyone to sign up, as the Affordable Care Act does," Kliff wrote.
"New York has, for 20 years now, been a long-running experiment in what happens to universal coverage without an individual mandate. It’s the type of law the country would have if House Republicans succeeded in delaying the individual mandate, as they will vote to do this afternoon. The result: a small insurance market with very high insurance premiums."
Just three years ago, the Kaiser Foundation shows, individual insurance rates in New York averaged $357. If they have really exceeded more than $1,000 since Obamacare was passed in 2010, something odd was at play.
One factor is simply numbers. Because insurers are required to accept all applicants regardless of health history, the premiums have escalated and the market has dried up.
"Only about 17,000 people buy insurance in New York's direct-pay market, a New York Department of Financial Services spokesman said," according to Reuters.
"That number is expected to grow by 615,000 over the next few years and more than half are expected to receive government subsidies,” Donna Frescatore, executive director of the New York Health Benefit Exchange, told Reuters.
In other words, rates should come down because the individual mandate will force healthy people into a market now glutted with the sick.