To provide all Americans with health insurance, premiums will have to rise to pay for it, Aetna CEO Mark Bertolini told CNBC's "Closing Bell" on Wednesday.
"If we're going to insure all Americans, which is a worthy and appropriate cause, then somebody has to pay for it," Bertolini said of the expected premium increases under Obamacare.
Bertolini said that insurance premiums could double in some places just on the basis of what types of policies people buy today.
Anticipating a criticism, Bertolini said that higher premiums wouldn't mean higher profit margins for insurance companies. The reason is that it will actually be more expensive to insure people due to some of the Obamacare mandates.
During the Obamacare debates, the Congressional Budget Office projected that premiums would rise due to the legislation, though not to the extent that Bertolini has now predicted. The CBO found that premium differences might roughly stay the same - may go up, may go down - in the group (employer-sponsored) markets, while seeing a fairly significant (10-13%) rise for the individual markets. While this doesn't seem like a particularly big deal, one of the facets of Obamacare is that it might cause employer dumping into the individual market, where people will see these increased premiums.
The CBO's analysis is not iron-clad, obviously, but it's very valuable as a way to put statements like Bertolini's into context. It's very likely that insurance premiums are going to rise system-wide. It's just a question of how much.
The Alberta Example: Spending Caps Are the Way to Prevent Unsustainable Fiscal Binges During Growth Years | Daniel J. Mitchell
Chicago's Fiscal Freefall: Moody's Cuts Chicago Credit Rating to Two Steps Above Junk | Mike Shedlock