Senate Bill: Health Premiums May Rise for Some

Posted in Health Insurance

December 2nd, 2009

One of the goals of the new health care bill was to make sure health insurance was more affordable for everyone, so while most premiums are expected to remain the same in Senate’s version of the bill, some may have to pay. According to a new analysis that came out recently from Senate, those who may have to pay more will likely be those buying coverage on their own.

Higher Bills if Purchasing Own Coverage

Congress has spent many months trying to craft a health care bill that would be affordable enough for everyone to be able to purchase what will likely be mandatory health insurance. After many committees have passed their own versions of the bill, Senate is now working on a latter version that may essentially land on the desk of President Barack Obama. However, kinks are still being worked out; one of which being costs.

According to an analysis released on Monday, Nov. 30, 2009 from the nonpartisan Congressional Budget Office and the Joint Committee on Taxation, those who pay for their own insurance would likely see a higher premium each month. That is, unless they are lower wage earners who are able to qualify for some type of government assistance. However, in exchange for higher premiums, the benefits are predicted to be more generous.

The Cost of Paying on Your Own

The analysis predicted that an estimated 14 million will purchase health insurance on their own by the year 2016. Here is a quick breakdown of estimated costs associated with paying on your own under current law versus the proposed legislation:

• Premiums for individuals: Under current law, the average annual cost per individual is $5,500. Under the new legislation, the average cost is predicted to be closer to $5,800 per year.
• Premiums for families: The cost for families is also expected to rise. Under current law, the annual cost is $13,100; however, under the new legislation, the cost is expected to jump to $15,200 per family.

Some other bits of info from the proposed legislation include the 40 percent excise tax, which is expected to hit more high-value insurance policies, as well as the possibility of insurance tax credits that would be available to families of four earning up to $88,000 a year and could provide cost reductions of close to 60 percent.

Senate Democrats have recently noted that they fully expect the health care overhaul to pass, but may still be in debates through December – or possibly even longer.

Do you think it’s fair for those who purchase their own insurance to pay higher premiums?