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Finding out what’s in it: A new analysis of Obamacare predicts that in the next ten years the number of uninsured Americans will increase by 10 percent while premiums will continue to rise.
We estimate that average annual costs for the cheapest individual plans—the “bronze” plans—may increase by 96 percent, from roughly $2,100 to nearly $4,200. Bronze family plans prices, meanwhile, may increase by nearly 50 percent. The average plan in this category could come close to $13,000 a year in total premiums. Almost every plan will see a price increase of some kind.
Consumers will learn these unpleasant truths in the fall of 2016 when they attempt to extend their policies.
No matter where you live, the effects will ripple across the entire industry. The dramatically higher prices will almost surely drive some consumers out of the exchanges. But they won’t have many places to turn. Many—perhaps most—won’t be eligible for Medicaid, while others won’t have jobs that offer replacement health insurance. People in this position will thus choose between health insurance they can’t afford and becoming uninsured. Not even the IRS penalty will convince everyone to bite the bullet.
Prior to 2016 the law allows insurance companies to use tax dollars, subsidizes from the federal government, to artificially depress premiums. After 2016 that option disappears, and the real cost of Obamacare gets passed to the consumer, most of whom will not be able to afford it.