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October 16, 2014

President Touts Lower Insurance Premiums, with Little Evidence

IPI expert referenced: Merrill Matthews | In The News | Media Hit
  Heartland Institute

BY KENNETH ARTZ

Insurance affordability was the great promise of President Obama’s Affordable Care Act (ACA) when the law was signed 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. Rather than reducing health care costs as promised, health insurance premiums have gone up under ObamaCare.

Among recent studies, a June 2014 Morgan Stanley report found increases are largely due to changes under the ACA, with women facing premium increases ranging from 23 percent to 237 percent. Another new study, by PricewaterhouseCoopers , reviewed 2015 individual market health insurance premiums and found they had increased an average of 15.4 percent.

And 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.”

No worse than before?

According to Merrill Matthews, resident scholar with the Institute for Policy Innovation, a free market think tank, health insurance costs will be going up 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, a free-market think tank, says employer coverage is also seeing increases.

“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.


 

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