A Study by the Libertarian leaning Texas Public Policy Foundation shows that the price spikes for insurance for healthy young Texans under Obamacare is much steeper than had been anticipated, 1200 WOAI news reports.
In fact, researcher John Davidson says catastrophic coverage for a healthy 27 year old man in San Antonio will go from $54 a month to $109.
"We knew there would be some increase, but the rate of increase over what is currently available was startling," Davidson told 1200 WOAI 's Michael Board.
The Institute found that some Texans will pay on average 158% more for the cheapest plan on the federal exchange than they would have paid prior to Obamacare. A 27 year old in Austin, for example, who could have purchased a catastrophic plan for $59 a month under the free market, will find the cheapest plan under the Affordable Care Act to be $153 a month.
The Institute says it looked at catastrophic health care plans for people under thirty, because their participation is critical for the premise behind Obamacare to work. In addition, the catastrophic plans for young adults are not eligible for subsidies. The higher costs on the exchange must be paid by the plan enrollee entirely out of pocket.
"Although costs vary throughout the state, and premium hikes are worse for men than for women, the trend is consistent," the Institute said. "In every major metropolitan area of Texas, rates on the exchange are higher."
"For a large number of young people, I believe they are going to choose their fiscal health over having health insurance," Davidson said, referring to the option to pay a $95 tax penalty instead of buying insurance. If too many healthy young people do that, the program will go into what actuaries call a 'death spiral,' where it has an excess of claims over income.
The study also found that the subsidies available for Texans under Obamacare are far from what proponents of the plan had claimed. For example, a 27 year old Houston resident earning 250 percent of the Federal Poverty Limit, or about $28,725 annually, will qualify for a subsidy of a whopping $8.40 a month, leaving him with a $192 a month out of pocket costs for the lowest priced plan on the exchange.
A 40 year old San Antonio resident earning $34,470 a year, far less than the average in the city, will not qualify for a subsidy at all, and will pay an annual out of pocket premium of $2871 for the second lowest plan on the exchange.
"By driving up the cost of coverage and then doling out subsidies to some people and not to others, the law creates winners and losers," the report concludes.