Despite efforts in the law to cut health costs for consumers, some insurance providers have warned that they will hike up premiums as much as 9 percent because of the legislation. But Sebelius said actuarial reports show that justifiable rate increases should be only around 1 or 2 percent as the law is implemented. Though she said she believes rate increases will be substantial, "it has little to do with passage of the Act and more to do with the marketplace."
Fascinating, isn't it? We're now told that Americans' premiums will increase after all, despite the passage of Obamacare. The impetus for the new higher fees, Sebelius says, can be traced back not to Obamacare, but to "the marketplace" (and the greedy insurance companies, natch).
Sebelius' new standard marks a major departure from one of the most famous promises the President made during the health care debate. Quick refresher: He said unambiguously that Americans' premiums would go down thanks to his plan. He even invented numbers to make the pledge seem more substantial -- rates would drop between "14 and 20 percent," he said--and some Americans would save as much as $3,000 per year. Today, his HHS Secretary is forecasting "substantial" rate increases while trying pawn the blame off on everyone but the government.
Also pay close attention to the term "justifiable rate increases." That innocuous little phrase is actually quite meaningful because: (a) the administration is conceding that some increases are, indeed, necessary to comply with their law, and that the silly "costs-will-go-down" line they peddled for more than a year was bogus all along, and (b) premium hikes beyond what the White House decrees to be "justified" will be met with political retribution in the form of HHS rejection. Gosh, I wonder how that might turn out.
Last week, the Wall Street Journal tried to explain the rudimentary economics of the Obamacare-fueled premium boosts to the administration:
But that just won't do. The White House party line must remain intact: The administration simply won't tolerate malevolent insurance companies citing basic economics lies to offer explanations excuses for why they're forced to raise premiums directly because of Obamacare's mandates their own undiluted avarice.
What Ms. Sebelius really means is that the government will prohibit insurers from doing business if reality is not politically convenient for Democrats. ObamaCare includes a slew of mandated benefits for next year, such as allowing children to remain on their parents' plans until age 26 and "free" preventative care (i.e., no direct out-of-pocket cost sharing for consumers). The tone of Ms. Sebelius's letter suggests that she doesn't understand that money is exchanged for goods and services, and that if Congress mandates new benefits, premiums will rise.
The Administration estimates that these regulations should increase all premiums by 1% to 2% on average. Even if that turns out to be right—on average—that isn't what insurers are finding in practice in the local, price-sensitive individual and small business insurance markets, where coverage is typically less comprehensive to hold down costs. For some current policies in some states, the one-year increase jumps as much as 9%.
Repeal and replace.
UPDATE: Ed Morrissey points to yet another unhappy byproduct of Obamacare: Insurers are deciding against offering new child-only plans because they can't afford to fulfill the law's new mandates. Their choices boiled down to either complying with the law and going belly-up, or no longer offering services rendered cost-prohibitive directly because of Obamacare's added mandates. Many companies are choosing the latter path, which will undoubtedly be met with shrieks of outrage from the Left, who will accuse the companies of loving profits more than "the children." Of course, the thousands of employees at these companies rely on those very wicked profits to remain employed so they can feed, clothe, and insure their own children.