NCPA - National Center for Policy Analysis

Obamacare Premiums Up 23 Percent

March 17, 2015

With enrollment data through February 22, the administration finally declared Obamacare's second enrollment season closed and released its report on the results. (Although, people who have to pay Obamacare's mandate/penalty/fine/tax as a result of information disclosed in their 2014 tax returns will have a special open enrollment in April).

Obamacare's supporters cheered that enrollment hit 11.7 million people, exceeding the low-ball estimate of 9.1 million the administration made last November. Lost in the enthusiasm for Obamacare's new high-water mark are a few uncomfortable facts.

  • The average premium — net of subsidies — has jumped 23 percent from 2014. The average monthly premium, before insurers receive subsidies, across all "metal" plans, is $364 in 2015. The average subsidy is $263, resulting in a net premium of $101.

  • In 2014, the administration reported an average premium of $346, less an average tax credit of $264, for a net premium of $82.

  • A loss for the administration in the Supreme Court's King vs. Burwell lawsuit will deal a mortal blow to Obamacare. This is the lawsuit asserting what the Administration is paying out of subsidies to insurers in state-based exchanges is illegal. Of the 11.7 million new enrollees, 8.8 million enrolled through healthcare.gov and only 2.8 million through state exchanges. 

Both the Obamacare subsidies and the Affordable Care Act's big increase in Medicaid spending are higher than necessary to get people covered. Although the average net premium jumped 23 percent, subscribers were nevertheless willing to pay up for a higher level of coverage. 

  • While 77 percent of the 7.65 million subsidized subscribers who used healthcare.gov could have bought plans for less than $50, only 38 percent did.

  • While 89 percent could have bought plans for less than $100, only 63 percent did. 

Obamacare subscribers have enough discretionary income to pay for health insurance and need not be so dependent on taxpayers. Despite a successful headline number of subscribers, Obamacare is still deeply flawed. 

Source: John R. Graham, "Obamacare's Second Open Season: Average Premium Up 23 Percent — after subsidies," National Center for Policy Analysis, March 16, 2015.

 

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