Tuesday, June 5, 2012

White House: We Promised a $2,500 Premium Cut. Here’s a $118 Rebate Instead.

The White House released a blog posting this morning attempting to trumpet examples of Obamacare’s medical loss ratio rebates, set to be delivered during the summer campaign season.  Herewith are some of the Obamacare “success stories” the White House is promoting on its website, along with my calculations about the average rebate check being disbursed in each case:

  • “BlueCross BlueShield of Tennessee has announced that it will pay $8.6 million to about 73,000 individual policyholders in August because they spent less than 80 percent of premiums on health care.” [Average rebate: $117.81 per policyholder.]
  • “In Arizona, more than $36 million in refunds will go to both consumers and small businesses.  One insurer in the state, Blue Cross Blue Shield of Arizona, alone will pay out an estimated $8.7 million to more than 77,000 individual policyholders, and another $3.2 million to more than 3,700 small businesses.”  [Average rebates: $112.99 per policyholder and $864.86 per business, respectively.]  “United Healthcare’s Golden Rule Insurance will refund nearly $8.7 million to more than 30,000 additional Arizona policyholders.” [Average rebate: $290 per policyholder.]
  • “Two insurers in California will pay out more than $50 million in rebates to nearly 1 million customers statewide.” [Average rebate: $50 per policyholder.]

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 $2,500 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.”

For the White House to claim now that a rebate check of $118, or even $290, comes anywhere close to meeting the President’s $2,500 premium promise shows how badly even the Administration recognizes the law has failed – by attempting to invoke the soft bigotry of low expectations when it comes to the unpopular 2700-page measure.