Today’s Big Story: How Obamacare Sparked Higher Premiums
The most important story in health care today does NOT revolve around the Justice Department’s decision to forego a review by the full Eleventh Circuit of Obamacare’s individual mandate, thus leading to a likely Supreme Court decision on the mandate next term. (For more on this story, see articles here, here, and here.) Rather, it involves the release of the Kaiser Family Foundation’s annual survey of employer-sponsored health insurance premiums. The survey notes that “compared to 2010, premiums for single coverage are 8% higher and premiums for family coverage are 9% higher. The 9% growth rate in family premiums for 2011 is significantly higher than the 3% growth rate in 2010.” In other words, Obamacare isn’t lowering premiums – in fact, premium increases have accelerated since Obamacare passed last year.
As a reminder, candidate Obama said repeatedly his bill would CUT premiums by an average of $2,500 per family – meaning premiums would go DOWN, not merely just “go up by less than projected.” The campaign also promised that that those reductions would occur within Obama’s first term. However, the annual Kaiser Foundation survey of employer-provided insurance found that average family premiums totaled $12,860 in 2008, $13,375 in 2009, and $13,770 in 2010 and $15,073 this year. In other words, while candidate Obama promised premiums would fall by $2,500 on average, premiums have already risen by $2,213 during the Obama Administration. (A visual representation of this broken promise – updated to reflect this year’s survey data – is below.)
Other conclusions that can be drawn from the Kaiser study:
- You CAN’T Keep Your Current Coverage: The survey found that only about half (56%) of workers were in plans that pre-date Obamacare’s enactment. The loss of employees’ pre-Obamacare coverage is occurring even faster than the Administration’s own estimates, which concluded half of all employers – and as many as 80% of small businesses – will be forced to give up their current coverage by 2013. Just as important, by giving up their pre-Obamacare plans, both employers and employees will be subjected to costly new mandates that will increase premiums.
- Small Business Tax Credit Ineffective: The percentage of small businesses offering coverage went DOWN by eleven percentage points, suggesting Obamacare’s temporary small business tax credit has not succeeded in persuading firms to offer coverage (if anything, the contrary may have occurred). The survey also found that only 29% of firms with under 50 employees even attempted to determine if they would be eligible for the credit, and of those, only 30% – or fewer than 9% of all small firms (i.e., 30% of 29%) – said they definitely planned to claim the credit for 2010 and 2011.
- New Requirements are Raising Premiums: Significant percentages of workers were in plans that had to change their services covered (31%) or cost-sharing requirements (23%) to meet Obamacare’s new preventive service mandates. These mandates by definition will raise premiums for plans, as this year’s 9% increase demonstrates.
Last year, former Speaker Pelosi famously said we had to pass the bill to find out what’s in it. Today we have once again found out just how much Obamacare is failing to live up to the President’s promises.