SALEM, Ore. (AP) — The federal health care overhaul will cause insurance premiums to rise, in some cases substantially, for Oregonians who buy their own insurance or get their coverage from a small employer, according to the findings of new study.
For many, the increases will be offset by new federal subsidies or decreases in other out-of-pocket health care costs.
The study, released Tuesday, said premium changes will vary widely from person-to-person or family-to-family once the law takes effect in 2014.
It projects that individuals who buy their own coverage will pay 38 percent more on average. Premiums for people who get coverage from an employer with 50 or fewer workers will rise by 4 percent on average, the study found. About 175,000 people get coverage in the individual market and 210,000 from the small group market in Oregon, according to state data.
The study was commissioned by the Oregon Insurance Division, and Gov. John Kitzhaber said in a letter that it's intended to help the state find ways to mitigate the higher costs.
Kitzhaber said the higher premiums that some people will pay reflect the true cost of the health care system, including costs of treating the uninsured that are shifted to people with insurance.
"The increased transparency can help us better understand and address the drivers of those costs as we work to improve access to care and the health of all Oregonians," Kitzhaber wrote.
Analysts said younger, healthier people who buy their own coverage will see the largest increases. Individuals who earn up to 400 percent of the federal poverty level — up to $44,680 — will be eligible for a federal subsidy to help cover their premium. Analysts say roughly half of the people in who currently enrolled in the individual market will qualify for a subsidy.
Cost increases in the individual market are attributed largely to new requirements for "essential health benefits" that insurance plans will be required to cover, along with the addition of sicker patients who are uninsured or currently covered by a high-risk insurance pool.
While premiums are expected to rise, consumers are expected to save on other out-of-pocket expenses, like services in the essential health benefits package. A workgroup appointed by the governor will recommend which benefits should be considered essential.
The analysis did not examine premiums for workers at large employers and didn't take into account provisions of the federal law that have already gone into effect, like a requirement that parents be allowed to cover their children through age 26.
It also did not look at the impacts of Kitzhaber's overhaul of the Oregon Health Plan, the state Medicaid program for people with low incomes. The plan is aimed at reducing the need for expensive hospital treatments by improving preventive care and helping people get basic medical care from a primary-care physician instead of the emergency room.
Experts cautioned that the estimates are inherently uncertain because so many variables affect the insurance market, and it's impossible to predict with certainty the actions of consumers and insurance companies.
The study was prepared by Wakely Consulting Group of Englewood, Colo.