Democrats and left-leaning media outlets promised that, if lawmakers failed to pass Obamacare, health insurance premiums would soar to levels that would be difficult for the majority of Americans to meet.
Former President Barack Obama, Vox Editor-in-Chief Ezra Klein, the Democratic Party and Media Matters all made the claim that premiums would skyrocket if Republicans refused to pass the Affordable Care Act (ACA), also known as “Obamacare” back in 2009.
The stakes are enormous—if we don’t get this done, your premiums are guaranteed to go up. http://bit.ly/5z9oXL
— Barack Obama (@BarackObama) December 16, 2009
WaPo’s @EzraKlein: “premiums will go down for the vast majority of Americans” under health reform. http://bit.ly/7ZefiP
— The Democrats (@TheDemocrats) December 1, 2009
— Media Matters (@mmfa) February 25, 2010
Since Obamacare was signed into law in 2010, we may never know if the former president and other supporters of the ACA were correct in claiming premiums would rise if it wasn’t passed. Americans can, however, look at health insurance premium increases before and after Obamacare to determine what impacts the legislation had.
In the two years leading up to the passage of the Affordable Care Act, premiums grew at an average rate of 10 percent or more per year, according to June 2014 analysis out of The Commonwealth Fund. Premiums grew at different rates, with some states experiencing increases of 3 percent and others experiencing more drastic increases of 21 percent.
Employer-based health insurance premiums for family plans increased by 62 percent across the U.S. from 2003 to 2011, with low-to-moderate income consumers getting hit with the swiftest, largest increases, according to a December 2012 report from The Commonwealth Fund.
So, on the one hand, Obamacare supporters had a valid point that premiums were increasing substantially before the ACA, but let’s analyze what happened to premiums after Obamacare took full effect in 2014. One of the chief aims of Obamacare was to make coverage more affordable for the average American, which would include lowering insurance premiums.
The evidence that Obamacare caused premiums to rise is overwhelming. Obamacare introduced new regulations into the health care marketplace that contributed to premiums doubling after the legislation took full effect in 2014, according to a report the Department of Health and Human Services (HHS) released May 23.
HHS compared premiums in the exchange marketplaces in 2013, one year before Obamacare regulations took full effect, to premiums in the exchange marketplace in 2017. The report found that average monthly premiums increased from $224 in 2013 to $476 in 2014. That constitutes a 105 percent increase in only four years.
Comparing the data, premiums rose 63 percent in the nine years leading up to Obamacare and 105 percent in the first three years after the legislation took effect.
The premium problem only continues to get worse, as major insurance providers across the U.S. are asking for double-digit premium increases for 2018. (RELATED: Iowa Obamacare Insurer Hiking Rates 43.5 Percent)
Minnesota-based Medica, one of the few remaining insurance providers on the Iowa Obamacare exchanges, announced Monday afternoon that it will offer plans on the state exchanges in 2018, but proposed an average premium increase of 43.5 percent.
In Connecticut, Anthem and ConnectiCare are seeking large premium hikes if they are going to offer plans on the exchanges in 2018. Anthem wants an average increase of 33 percent and ConnectiCare an average premium increase of 15 percent. (RELATED: Connecticut Could Lose Government Subsidized Insurance In 2018)
The largest Obamacare insurance providers in Maryland, Virginia and Delaware are requesting premium increases of 30 percent for 2018. Proposals for North Carolina, Oregon and Maine are around 20 percent or higher for major Obamacare insurance providers.
Insurance providers are raising premiums for two reasons: Companies are continuously finding it difficult to enroll enough healthy individuals in the marketplace to offset the costs, and they face a great deal of uncertainty as to whether or not the Trump administration and Republican leadership in Congress will continue paying out Obamacare subsidies, like cost-sharing reductions (CSRs). (RELATED: The Potentially ‘Unconstitutional’ Feature Of Obamacare Everyone Is Ignoring)
CSRs are the “secret sauce,” Executive Director of Covered California Peter Lee said Thursday at the America’s Health Insurance Plans in Austin, Texas. “The reason people buy coverage that they didn’t before is because they get financial help to do it.”
Democrats in Congress argue that the Obamacare marketplace would be stable if the Republicans would fund subsidy payments for former President Barack Obama’s landmark health care legislation.
Insurance companies fear that increasing premiums will drive more healthy individuals out of the Obamacare marketplace, a situation that would cause further disruption to a system that is already ailing.
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