National Journal: Premiums Rising Under Obamacare


National Journal is one of the most respected political and news reporting organizations in Washington. As of August 29, that influential voice is firmly on the side of Tea Party activists when it comes to the higher premiums Americans will pay under Obamacare:

Republicans have long blamed President Obama’s signature health care initiative for increasing insurance costs, dubbing it the “Unaffordable Care Act.”

Turns out, they might be right.

For the vast majority of Americans, premium prices will be higher in the individual exchange than what they’re currently paying for employer-sponsored benefits, according to a National Journal analysis of new coverage and cost data. Adding even more out-of-pocket expenses to consumers’ monthly insurance bills is a swell in deductibles under the Affordable Care Act.

The analysis from National Journal is absolutely devastating to Obamacare’s effects on costs. Here are a few highlights:

First, employers are likely going to continue dropping employee insurance coverage – despite what the law’s supporters say:

Health law proponents have excused the rate hikes by saying the prices in the exchange won’t apply to the millions receiving coverage from their employers. But that’s only if employers continue to offer that coverage–something that’s looking increasingly uncertain.

In other words, you can keep your doctor if you want, unless your boss can’t afford to provide insurance, at which point you’ll either have to find a new doctor or pay more to keep your doctor.

Second, the Administration is claiming lower premiums – but only compared to prior projections, not to current premiums. Emphasis added:

“In 16 states that HHS studied, premiums were on average almost 20% lower than what the Congressional Budget Office projected,” [HHS spokesperson] Peters wrote in an e-mail.

Premiums may be lower than predicted, but they’re not competitive with what workers are now paying for employer-sponsored care.

On average, a worker paid between $862 and $1,065 per year for single coverage in 2013, according to Kaiser’s numbers. For the average family plan, defined as a family of four, insurance cost between $4,226 and $5,284.

Fewer than half of all families and only a third of single workers would qualify for enough Obamacare tax subsidies to pay within or below those averages next year.

National Journal points out that while 81% of employers don’t plan on dropping employees, according to a report by Deloitte, there exists a great level of uncertainty, as the state exchanges and subsidies haven’t been implemented yet. And dropping employees is, to quote National Journal, “just logistically easier than trying to meet the law’s employer mandate”:

The truth is, Obamacare is doing what it was intended to do: make health care affordable for the nation’s lowest earners by spreading out the costs among taxpayers.

The trap is that the exchanges also present a savings for some employers but a rate hike for their employees.

And shifting employees to the exchanges also is just logistically easier than trying to meet the law’s employer mandate.

Finally, the crux of the problem with Obamacare is identified in the closing of the article:

Perhaps the biggest obstacle Obamacare faces today isn’t getting people in the system, but making sure those who do get in actually receive affordable care.

Exactly. Getting people into a system is easy – first, incentivize employers to drop care. Next, incentivize individuals to sign up for the system by providing “free” money for enrolled people.

Under Obamacare, both systems have been set up. The problem now is, as it was long predicted to be, actually finding affordable having health insurance. Therein lies the problem – government-controlled health insurance and health care cannot compete with free market-based systems. Obamacare needs to be repealed before there’s nothing left to compete with.