Insurance Premiums Are Rising Though President Claims the Opposite
by Kenneth Artz
October 16, 2014
Insurance affordability was the great promise of President Obama’s Affordable Care Act (ACA) when he signed the law in 2010. On the campaign trail in 2008 President Obama promised his plan would “lower premiums by up to $2,500 for a typical family per year.”
Four years later, Obama still touts the savings for Americans from his law, claiming his signature legislation is making health care premiums more affordable.
"If we hadn’t taken this on, and premiums had kept growing at the rate they did in the last decade, the average premium for family coverage today would be $1,800 higher than they are," Obama told an audience at Northwestern University on October 2. "That’s like an $1,800 tax cut."
Rising Premiums for Most
There’s little support for the president’s claims, however. Instead of reducing health care costs as promised, Obamacare has led to increases in health insurance premiums.
Among recent studies that have identified such increases, a June 2014 Morgan Stanley report found the premium increases are attributable largely to changes under the ACA, with women facing premium increases ranging from 23 percent to 237 percent. A new study by PricewaterhouseCoopers found year-2015 individual-market health insurance premiums had increased an average of 15.4 percent.
In Alaska, the Division of Insurance announced in September, “as a direct result of the ACA, insurers offering health plans in the individual market require historic rate increases, as high as 37 percent in 2015.”
Merrill Matthews, a resident scholar with the Institute for Policy Innovation, says health insurance costs are rising because Obamacare creates incentives for more people to use more care.
“It's an indication of just how much the health insurance reform debate has changed that Obamacare defenders are now thrilled that premiums are going up on average only 7 percent or 8 percent. They now proudly claim that's no worse than it was before Obamacare, even though the promise had been that premiums would go down,” Matthews says.
Devon Herrick, a senior fellow with the National Center for Policy Analysis, says the cost of employer-provided coverage is also rising.
“The Obama administration admits that about two-thirds of employers will see their costs rise due to new regulations, while only one-third will see their costs fall slightly,” says Herrick.