Diary

Health insurance premiums are skyrocketing under the 'Affordable' Care Act

Remember when we were told that the Patient Protection and Affordable Care Act would “bend the cost curve downward”? From The Wall Street Journal:

ObamaCare’s Wallet-Buster Health Plans

While insurance premiums and deductibles soar, Hillary Clinton takes credit for the president’s mess.

By Nathan Nascimento | January 31, 2016 6:22 p.m. ET

On the campaign trail in Iowa, Hillary Clinton claimed that President Obama’s Affordable Care Act is little different than her health-care plan in 1993. “It was called HillaryCare before it was called ObamaCare,” she told supporters on Jan. 21.

Her timing was awkward. That same day, the Department of Health and Human Services announced that health-insurance premiums on the Affordable Care Act exchanges rose an average of 9% between 2015 and 2016.

But the HHS data account for less than half of individual-exchange consumers buying coverage only on the 38 states using the federal exchange. The overall premium increases were significantly higher.

Freedom Partners Chamber of Commerce, where I work, has analyzed all publicly available information for health-insurance premiums from healthcare.gov and state insurance departments. It then calculated the weighted averages for all health-insurance plans available on the Affordable Care Act’s exchanges. The weighted average gives a more accurate view of overall premium increases, because it takes into account each insurance plan’s market share.

The findings: Nationally, premiums for individual health plans increased on average between 2015 and 2016 by 14.9%.

Consumers in every state except Mississippi faced increased premiums, and in no fewer than 29 states the average increases were in the double digits. For a third of states, the average premiums rose 20% or more.

There’s a lot more at the original, much of it the individual state data, but it all boils down to what we have said before: you cannot add millions of people who could not previously afford health insurance rolls to the insurance rolls, with subsidized if not outright paid-by-the-government premiums without increasing costs. The lovely Mrs Clinton is trying to claim some share of the credit for Obaminablecare; the question becomes whether more people will see an increase in the number of people insured as a better thing than the increased costs that they are bearing due to the program.

As Iowa voters go to the caucuses this evening, it’s time to point out that Iowans saw an average increase of 22.0%, ranging from a 9.4% increase on the low end, to 28.7% for the people hit hardest. Remember, these are premium increases over just one year, while the inflation rate for 2015 was a whopping 0.7%

Think about that: every state except Mississippi, which saw a slight decrease of 0.2%, saw health insurance premiums rise in excess of the inflation rate. Indiana, which saw the second lowest increase still averaged a 1.0% increase in premiums, higher than inflation. Not only are people going to see higher taxes, as government spending to pay the premium subsidies — an expense which was zero prior to the passage of the Patient Protection and Affordable Care Act — increases, but their own insurance premiums are increasing as well. Call it a one-two punch.

Well, the tax increases haven’t happened yet, for most people — the top producers have seen tax increases under the ACA — but they will, because eventually taxes will have to be increased to pay for all of this, but the premium increases have already hit.
_______________________
Cross-posted on The First Street Journal
_______________________
¹ – While health insurance costs are rising faster than the rate of inflation, medical care costs are also included in the official inflation rate. Thus, the official inflation rate is higher in part due to the increased health insurance costs.