Wednesday, May 16, 2012

How Obamacare Is RAISING Premiums and Costs

The Administration has announced a conference call with press this afternoon, where Secretary Sebelius is expected to make announcements regarding Obamacare’s exchanges.  It is likely that the Administration will once again attempt to repeat the old saw that Exchanges will lower premiums.  Here’s what you need to remember about this bogus claim:

  1. Obamacare’s Exchanges will actually RAISE premiums, not lower them.  The Administration claim that Exchanges will lower premiums ignores the fact that Obamacare’s new benefit mandates will increase individual market insurance premiums overall – by an average of $2,100 per family, according to the Congressional Budget Office.  CBO also agrees that much of this increase in premiums will come from individuals being forced to buy richer coverage than they may need or want.  Politico summarized this HHS sleight-of-hand: “The Administration omits a part of CBO’s analysis.…[Obamacare] requires the purchase of benefit packages that are more comprehensive than what many Americans would otherwise buy.  These more generous benefit packages may mean higher premiums.”
  2. Candidate Obama repeatedly promised premiums would go down by $2,500 – and would go down that amount by this year.  For instance, in a speech on February 27, 2008, he said that “We’re going to work with you to lower your premiums by $2500 per family per year.  And we will not wait 20 years from now to do it or 10 years from now to do it.  We will do it by the end of my first term as President.”  Likewise, in July 2008, Jason Furman – who remains a senior economic advisor within the Administration – told the New York Times that “we think we could get to $2,500 in savings by the end of the first term, or be very close to it.”
  3. Secretary Sebelius has publicly admitted that candidate Obama’s goal of a $2,500 premium reduction will not be met.  In September 2010, she said that premium “rate increases are likely to continue to be somewhat substantial.”  And earlier this year, she conceded to questioners at both the House and Senate Appropriations Committees that premiums would not fall until at least 2014, when the Exchanges are first established.  Of course, the Exchanges actually won’t reduce premium costs, as noted in point #1 above.  Regardless, lower premiums in 2014 do NOT meet candidate Obama’s promise: he pledged premiums would go down by $2,500 “by the end of my first term as President.”
  4. Yet another survey issued this week illustrates how Obamacare is NOT controlling health costs or premium increases, both of which continue to skyrocket.  Actuaries at Milliman released their annual medical index yesterday, and it found that the total cost of health care for a family of four in a preferred provider organization rose by 6.9% this year – such that costs now exceed $20,000 for a family of four.  The record $1,335 increase in costs this year alone is far from the $2,500 cut candidate Obama promised back in 2008.

This afternoon’s call should not focus on Secretary Sebelius repeating the same old, tired, and debunked claims that Obamacare will lower premiums.  The real question is whether the Secretary will finally apologize on behalf of the entire Obama Administration for failing to deliver on its broken promise to lower health costs NOW for struggling middle-class families.