Will Obamacare Raise Insurance Premiums? – DEBATED
General Reference (not clearly pro or con)
Douglas W. Elmendorf, PhD, Director of the Congressional Budget Office (CBO), stated in a Mar. 30, 2011 testimony before the House Subcommittee on Health Committee on Energy and Commerce "CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010." The transcript is available at www.cbo.gov:
"Under PPACA and the Reconciliation Act, premiums for health insurance in the individual market will be somewhat higher than they would otherwise be, CBO and JCT estimate, mostly because the average insurance policy in that market will cover a larger share of enrollees' costs for health care and provide a slightly wider range of benefits. The effects of those differences will be offset in part by other factors that will tend to reduce premiums in the individual market; for example, purchasers in that market will tend to be healthier than they would have been under prior law, leading to lower average costs for their health care. Although premiums in the individual market will be higher on average, many people will end up paying less for health insurance—because the majority of enrollees purchasing coverage in that market will receive subsidies via the insurance exchanges.
Premiums for employment-based coverage obtained through large employers will be slightly lower than they would otherwise be; premiums for employment-based coverage obtained through small employers may be slightly higher or slightly lower."
Will Obamacare Raise Insurance Premiums? – DEBATED
Gigi A. Cuckler, Andrea M. Sisko, PhD, and Sean P. Keehan, Economists in the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS), et al., stated the following in their Sep. 2013 article “National Health Expenditure Projections, 2012-22: Slow Growth until Coverage Expands and Economy Improves, published in Health Affairs:
"On a per enrollee basis, growth in private health insurance premiums is expected to accelerate to 6.0 percent, up from 3.2 percent in 2013.
This acceleration is driven by expected increases in utilization for those covered through the Marketplaces. For these people, the availability of new, or potentially more generous, coverage through the Affordable Care Act’s coverage expansion—as well as the presence of premium and cost-sharing subsidies that partially offset the cost of care—is expected to lead to increased spending relative to their current status.”
Drew Gonshorowski, MA, Policy Analyst in the Center for Data Analysis at The Heritage Foundation, stated the following in his Oct. 16, 2013 Issue Brief #4068, "How Will You Fare in the Obamacare Exchanges?," available at heritage.org:
"Individuals in most states will end up spending more on the exchanges. It is true that in some states, the experience could be the opposite. This is because those states had already over-regulated insurance markets that led to sharply higher premiums through adverse selection, as is the case of New York. Many states, however, double or nearly triple premiums for young adults. Arizona, Arkansas, Georgia, Kansas, and Vermont see some of the largest increases in premiums...
Many individuals will experience sticker shock when shopping on the exchanges. It is clear that many policies and cross-subsidization within Obamacare will lead to upward shifts in premiums...
…[T]he claims of savings on premiums for the average participant is a fantasy."
Paul Howard, PhD, Director and Senior Fellow at the Center for Medical Progress of Manhattan Institute for Policy Research, stated in his Aug. 1, 2012 article "Making Health Care Worse," available at www.nationalreview.com:
"Health-insurance costs have already risen significantly since the passage of Obamacare, albeit at a slower rate than before, owing to a stagnant economy. Since the law imposes heavy costs on the insurance industry — through taxes and onerous regulations that force insurance companies to spend more on health expenses — insurance premiums will likely continue to rise.”
Douglas Holtz-Eakin, PhD, President of the American Action Forum, wrote in his Mar. 9, 2011 paper "Higher Costs and the Affordable Care Act," available at www.americanactionforum.org:
"Objective analysts have uniformly concluded that the new law raises – not lowers – national health-care spending. The rising bill for national health care spending will produce sustained upward pressures on health insurance premiums.
In addition, the law's array of insurance market reforms will increase premiums. Barring limits on annual and lifetime out-of-pocket spending, coverage of children's pre-existing conditions and the ability for children to stay on parents' policies are all initiatives that enhance benefits. These benefits must necessarily be covered by higher premiums."
Chris Carlson, Fellow of the Society of Actuaries and Actuarial Principal at the consulting firm Oliver Wyman, wrote in his Oct. 31, 2011 report "Estimated Premium Impacts of Annual Fees Assessed on Health Insurance Plans," available at www.ahipcoverage.com:
"Our analysis estimates that the insurer fees [under Obamacare] will increase premiums in fully insured coverage markets by an average of 1.9% to 2.3% in 2014. The impacts generally increase over time such that we estimate by 2023, the fees will ultimately increase premiums by an average of 2.8% to 3.7%. For small group coverage, this will on average increase the cost to cover an individual by about $2,800, and a family by about $6,800 over a 10-year period, beginning in 2014."
Drew Altman, PhD, President and CEO of the Kaiser Family Foundation (KFF), wrote in his Sep. 27, 2011 article "Rising Health Costs Are Not Just a Federal Budget Problem," available at www.kff.org:
"…[R]egardless of how you feel about the Affordable Care Act, its effect on premiums this year is modest. Most of the law's provisions don't go into effect until 2014. The two biggest changes this year allow young adults up to age 26 to stay on their parents' insurance policies and require some insurance plans to cover preventive services at no cost to patients. These are popular provisions that provide real benefits, and combined they account for about one to two percentage points of this year's premium increase."
Jim DeMint, MBA, US Senator (R-SC), stated in his May 16, 2012 posting "How ObamaCare Is Raising Premiums & Costs," available at www.demint.senate.gov:
"ObamaCare's Exchanges will actually RAISE premiums, not lower them. The Administration claim that Exchanges will lower premiums ignores the fact that ObamaCare's new benefit mandates will increase individual market insurance premiums overall -- by an average of $2,100 per family, according to the Congressional Budget Office.
…[Obamacare] requires the purchase of benefit packages that are more comprehensive than what many Americans would otherwise buy. These more generous benefit packages may mean higher premiums."
Christine Eibner, PhD, Economist at the RAND Corporation, and Amado Cordova, PhD, Senior Engineer at RAND Corporation, et al., stated the following in their Aug. 2013 report "The Affordable Care Act and Health Insurance Markets: Simulating the Effects of Regulation," available at rand.org:
"Our estimates indicate that, on average, out -of-pocket premium spending for nongroup enrollees will fall due to new federal tax credits available after the Affordable Care Act takes full effect…
In our main estimates, which assume that the individual and small group markets are split for the purposes of risk pooling, we find little to no change in small group premiums as a result of the law. For nine out of ten states considered, and for the United States overall, we find virtually no difference in age - , actuarial value - , and tobacco use – standardized small group premiums in scenarios with and without the Affordable Care Act. Of course, individual firms may experience an increase or decrease in premiums, depending on the health status of their enrollees. However, overall, we find no evidence to suggest that small premiums will systematically change as a result of the law."
Barack Obama, JD, 44th President of the United States, stated the following during a July 16, 2012 campaign event "Remarks by the President at a Campaign Event," available at www.whitehouse.gov:
"You should know that once we have fully implemented [Obamacare], you're going to be able to buy insurance through a pool so that you can get the same good rates as a group that if you're an employee at a big company you can get right now -- which means your premiums will go down."
The US Department of Health and Human Services stated in its Sep. 23, 2011 report "Reducing Costs, Protecting Consumers: The Affordable Care Act on the One Year Anniversary of the Patient’s Bill of Rights," available at www.healthcare.gov:
"This report outlines how the Affordable Care Act is strengthening the health care system for all Americans and helping to control health care costs. The report finds that the Affordable Care Act's reforms have helped reduce premiums and hold insurance companies more accountable, and the Administration's anti-fraud efforts alone will save $1.8 billion through 2015...
The MLR [Medical Loss Ratio] provision is already forcing insurance companies to carefully evaluate their rates, slow the rate of premium growth and, in some cases, decrease premiums..."
David M. Cutler, PhD, Otto Eckstein Professor of Applied Economics at Harvard University, Karen Davis, PhD, President of The Commonwealth Fund, and Kristof Stremikis, MPP, MPH, Senior Research Associate for Commonwealth Fund, wrote in their May 21, 2010 report "The Impact of Health Reform on Health System Spending," available at www.commonwealthfund.org:
"We estimate that, on net, the combination of provisions in the new law will reduce health care spending by $590 billion over 2010–2019 and lower premiums by nearly $2,000 per family. Moreover, the annual growth rate in national health expenditures could be slowed from 6.3 percent to 5.7 percent...
Reducing insurer administration and modernizing the delivery of health care services will each result in reductions in private insurance premiums. Private premiums might be affected by other provisions as well. For example, an excise tax on high-premium health insurance plans, set to take effect in 2018, will introduce a strong financial incentive for insurers to trim benefits and reduce costs below a tax-free threshold of $10,200 for individual coverage and $27,500 for family coverage. Indexing this cap to the overall rate of inflation in the economy plus one percentage point will encourage insurers to seek out value and efficiency continually, thus placing downward pressure on premiums over time."
Tom Harkin, US Senator (D-IA), stated in his Apr. 20, 2010 speech to the Health, Education, Labor, and Pensions Committee "Statement of Chairman Tom Harkin (D-IA)," available at www.harkin.senate.gov:
"Those significant premium savings [under Obamacare] are the result of bringing everyone into the insurance pool, as well as administrative savings from larger purchasing pools and prohibiting medical underwriting for health status and pre-existing conditions. And of course, the Affordable Care Act includes an array of reforms to reward quality and value, which will reduce health care costs over the long term.”