True Costs of Obamacare: Double-Digit Rate Hikes, High Penalties

Though many are still cheering last month's U.S. Supreme Court decision on Obamacare, the true costs of the president's signature Affordable Care Act, including double-digit rate hikes, are just now coming to light.

Obamacare’s insurance premiums could jump an average of 41 percent in rates during its first year, following the path that critics prophesied would occur once the benefit mandates, taxes, fees, and regulations take effect in the wake of the U.S. Supreme Court’s ruling, which upheld those subsidies.

The Patient Protection and Affordable Care Act reneges on President Barack Obama’s claim that his law would spare U.S. citizens from double-digit premium increases each year, according to Forbes' Sally Pipes. Instead, health insurers in various states are asking for those premium increases, some requesting up to a 51-percent increase rate hike after suffering huge losses, such as Blue Cross Blue Shield in Minnesota.

These insurance providers cite “increasing medical costs and the fees and charges” imposed by Obamacare as the reasons for requesting premium boosts when the “actual claims experience . . . is significantly higher than expected,” according to Forbes.

Obamacare regulations, including “guaranteed issue” and “community rating,” have been required by big-government healthcare despite failures in seven states that had previously tried them, according to a Milliman report. These restrictions forbid insurance companies to turn people away for health reasons or charge others more in light of their health status and history.

All of these costs, as well as other predicted penalties and restrictions, will result in a $2 trillion cost over the next decade as predicted by the Congressional Budget Office, according to the Washington Examiner. These costs also take into account the gross cost, net cost, and the deficit effect of Obamacare that the federal government will dole out on the expanding coverage to millions of Americans.

Obamacare will also hit Americans with penalties as high as $975 per family for those who are uninsured, according to CBS News. This penalty will affect particularly lower-income and middle-income households.

“There is very little awareness of this,” said senior analyst Laura Adams of InsuranceQuotes.com, according to CBS News. “Until people understand the financial consequences, they don't have an incentive.”

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• Health Premiums Skyrocketing Under Obamacare