The Congressional Budget Office report that predicted ObamaCare will result in 2.3 million fewer workers took many Democrats and the White House by surprise. They should prepare themselves for even more surprises as people respond to higher ObamaCare premiums.
Health insurance actuaries have a lot of data that provide some indication of how people respond when premiums go up, as they are under ObamaCare. Some will bite the bullet and pay more. Others will replace their current coverage with a less expensive, and probably less comprehensive, policy. And still others will join the ranks of the uninsured.
For example, under a typical actuarial model about 2.5% of those with comprehensive coverage facing a 10% premium increase (above the normal inflation rate) would be expected to drop their coverage and become uninsured, and nearly a third would shift to a less expensive policy.
For those facing a 50% increase, 20% would likely drop coverage and 65% would look for a less-expensive policy.
For those with standard coverage, a 10% increase would result in 5% becoming uninsured and 35% shifting to very basic coverage, while a 50% increase could see 30% dropping coverage and 60% looking for something more affordable.
Moving to those who have what's called a "lean" policy, a 10% increase would push an estimated 43% into the ranks of the uninsured, and a 50% increase could see 80% dropping coverage.
As we now know, some individuals living in states with a well-functioning individual health insurance market are seeing a doubling of premiums. For them, the models suggest about 30% of those with rich coverage, 40% with moderate coverage, and an astounding 88% with lean coverage will become uninsured.
The reason so many with lean coverage drop their policies is they tend to have lower incomes and so can't afford significant premium increases. In addition, there isn't much left for them to transition to; they already have bare-bones coverage.
The Obama administration claims that taxpayer-provided subsidies will dramatically reduce the effective cost of insurance. But consumers will still focus on what the policy will cost them even after any subsidies.
If the premium doubles under ObamaCare, and the subsidies reduce that effective price by 50%, the individual still faces a 50% increase, and the actuarial model still applies, at the 50% increase rate.
Democrats are hoping that the mandate to buy health insurance will keep people from dropping coverage. But the penalty is low compared to the cost of insurance, and it's possible that officials will ignore it. It certainly wouldn't be the first time the Obama administration refused to enforce a law for political reasons.
The actuarial models indicate the premium increases will result in millions of Americans shifting to less-comprehensive coverage and more people being uninsured than was anticipated. And that clearly appears to be what is happening.
Even so, it's impossible to anticipate precisely how millions of people will respond to dramatic changes in health insurance, new taxes and subsidies and penalties, limits on which doctors patients can see, and perverse economic incentives.
However, people look for alternatives. It's possible that the final premium many settle on won't be that much different from what they had been paying, even with substantial rate increases, because they are reducing their level of coverage or paying more out of pocket. How many people will throw up their hands and become uninsured is anybody's guess.
There were about 50 million people uninsured when ObamaCare passed in March 2010. That recent CBO study estimated that after implementation there will still be about 44 million uninsured Americans, a significant increase over CBO's initial estimates of some 30 million still being uninsured.
Think about that: trillions of taxpayer dollars being spent, millions of Americans upset over having their coverage canceled or premiums explode for the same coverage, Democrats losing the House in 2010 and possibly losing the Senate in 2014, one big headache after another for the Obama administration and the program's disastrous rollout, and all that for some 6 million fewer uninsured Americans.
The president says we can't go back to the old system that left so many people without coverage, yet that appears to be exactly what is happening under ObamaCare. Solving the problem of the uninsured and the uninsurable could have been done with a lot less money and political upheaval, and with bipartisan support. And best of all, there's still time of do it.