Wednesday, December 12, 2012

A Big Premium Failure for Obamacare — and the Commonwealth Fund

The Commonwealth Fund is out this morning with its annual study regarding premium increases – which shows once again how badly both Obamacare, and Commonwealth itself, have failed in their premium projections.  The study admits that “health insurance is expensive and has become less affordable, no matter where one lives.  Insurance premiums rose sharply in all states during these eight years [i.e., 2003 to 2011] and, because wages failed to keep pace, increase as a share of median household income.”  But the report claims Obamacare will change all that:
If premium growth were to slow to 1 percentage point below projected levels if recent rates of increase continue, the cost of family coverage would drop an average of $700 annually by 2015 and $2,029 by 2020.…Even greater amounts could be saved if the annual premium growth rates were to slow by 1.5 percentage points.  An average of $1,042 could be saved annually on family coverage by 2015.  The savings would more than double to $2,986 annually by 2020.

There are two problems with this approach.  First, under Commonwealth’s “best-case” scenario, premiums would still total $21,754 by 2020 – that’s an increase of $6,732 from 2011 alone.  But candidate Obama promised repeatedly that his health plan would cut premiums – not merely “slow the growth rate,” but CUT premiums in absolute terms – by an average of $2,500 per family within his first term.  A projected increase of “only” $6,700 under Commonwealth’s best case scenario comes nowhere near close to meeting candidate Obama’s pledge to cut premiums by $2,500 – rather, it breaks that promise by nearly $10,000 per family.

The second issue is the way in which the Commonwealth Fund, just like candidate Obama himself, has consistently moved the goalposts in the wrong direction – admitting every year that the premium savings it promises are just around the corner have not materialized:

  • In 2010, Commonwealth claimed that we could save $3,403 in premiums by 2020, and that under its best case scenario, premiums would total $19,938 per family in that year.
  • Last year, Commonwealth claimed that we could save $3,173 in premiums by 2020, and that under its best case scenario, premiums would total $20,620 per family in that year.
  • This year, Commonwealth claims that we could save $2,986 in premiums by 2020, and that under its best case scenario, premiums would total $21,754 per family in that year.

Notice a pattern here…?

Given that Commonwealth’s supposed premium savings are disappearing faster than a pile of magic beans, why should we believe them – or the President – that Obamacare will EVER do anything to control the skyrocketing premiums harming struggling families?  Instead of holding campaign-style rallies in an attempt to raise taxes on job creators, President Obama could get to work on fulfilling his campaign pledge, and avoid socking middle-class families with tens of thousands of dollars in higher premium costs due to his unpopular law’s failure to deliver.