WASHINGTON (AP) — Medical claims costs — the biggest driver of health insurance premiums — will jump an average 32 percent for Americans' individual policies under the Patient Protection and Affordable Care Act (PPACA), according to a study by the nation's leading group of financial risk analysts.
The report could turn into a big headache for the Obama administration at a time when many parts of the country remain skeptical about PPACA. The estimates were recently released by the Society of Actuaries to its members.
Millions of now-uninsured people will be covered as the market for directly purchased insurance more than doubles with the help of government subsidies. The study found that market will grow to more than 25 million people. But costs will rise because spending on sicker people and other high-cost groups will overwhelm an influx of younger, healthier people into the program.
Some of the higher-cost cases will come from existing state high-risk insurance pools. Those people will now be able to get coverage in the individual insurance market, since insurance companies will no longer be able to turn them down. Other people will end up buying their own plans because their employers cancel coverage. While some of these individuals might save money for themselves, they will end up raising costs for others.
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