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What Is Normal?

Study: Average Individual Market Premiums Soar 49 Percent Under Obamacare

Let's begin with Barack Obama's infamous words:

That central Obamacare promise, like its closest cousins, have been downgraded and revised to death. Last year, scholars at the Manhattan Institute ran a 49-state analysis of individual market healthcare rates under Obamacare and found a 41 percent increase on average. Their follow-up study of more than 3,100 counties across the country pegs the average hike at 49 percent. Consumers in New York -- home to a distorted, "death spiral"-plagued individual market prior to Obamacare -- are among the few Americans who've enjoyed an average rate drop. Virtually everywhere else, price tags went in the wrong direction:

Across the country, for men overall, individual-market premiums went up in 91 percent of all counties: 2,844 out of 3,137. For 27-year-old men, the average county faced 91 percent increases; for 40-year-old men, 60 percent; for 64-year-old men, 32 percent. Women fared slightly better; their premiums “only” went up in 82 percent of all counties: 2,562 out of 3,137. That’s because Obamacare bars insurers from charging different rates to men and women; prior to Obamacare, only 11 states did so. Because women tend to consume more health care than men, the end result of the Obamacare regulation is that men fare somewhat worse. Relative to men, the average rate increase for women was less extreme: 44 percent for 27-year-olds; 23 percent for 40-year-olds; 42 percent for 64-year-olds.

Premiums have increased in the large and small group markets as well -- in addition to higher out-of-pocket costs such as deductibles and copays for many consumers. Insurers across the country have been releasing a "drumbeat" of projected 2015 rate hikes throughout the spring, which will spill over into the summer and early fall. More Americans say their health costs are going up, not down, with large majorities expecting Obamacare to raise costs in the long term. Numerous surveys have demonstrated Obamacare's ratio of "hurt" to "helped" among consumers is roughly 2-to-1. The White House, meanwhile, is very excited about a HHS report indicating that a large majority of subsidy-eligible enrollees have seen their premiums decrease. First of all, isn't it interesting that HHS has the capacity to tabulate and release those figures when they're apparently unable to produce other pertinent how many sign-ups are unpaid, and how many "new" enrollees previously had insurance? Secondly, Obamacare's core promise wasn't "we will raise health costs for millions, collect lots of taxes, then use that money to offset some people's healthcare bills." It was "everyone's rates will drop significantly, and the federal government's cost curve will bend down, thus helping to reduce deficits." The former message would have been dead on arrival, politically speaking. The latter vision, as most people expected all along, has failed to materialize. Nevertheless, the administration is excited about all the subsidies they're handing out. But that munificence doesn't occur in a vacuum, and the money has to come from somewhere. Ta-da:

The large subsidies for health insurance that helped fuel the successful drive to sign up some 8 million Americans for coverage under the Affordable Care Act may push the cost of the law considerably above current projections, a new federal report indicates...While the generous subsidies helped consumers, they also risk inflating the new health law’s price tag in its first year. The report suggests that the federal government is on track to spend at least $11 billion on subsidies for consumers who bought health plans on marketplaces run by the federal government, even accounting for the fact that many consumers signed up for coverage in late March and will only receive subsidies for part of the year. That total does not count the additional cost of providing coverage to millions of additional consumers who bought coverage in states that ran their own marketplaces, including California, Connecticut, Maryland and New York. About a third of the 8 million people who signed up for coverage this year used a state-run marketplace…If these state consumers received roughly comparable government assistance for their insurance premiums, the total cost of subsidies could top $16.5 billion this year. That would be far higher than projections this spring from the nonpartisan Congressional Budget Office that the 2014 subsidies would cost the federal government $10 billion.

Says Reason's Peter Suderman, "to the extent that insurance is relatively cheap [for subsidy-eligible exchange enrollees], it’s because taxpayers are footing a big chunk of the bill. Obamacare didn’t reduce the price of insurance; if anything it raised it—and then used tax revenues to cover the difference." Yep. A portion of the population benefits from taxpayers' compulsory generosity, while virtually everyone else's rates head north. How will the sharply-increasing price tag (described in the LA Times report above), coupled with all of the shifting pay-fors, impact the law's long-term fiscal impact? We may never know. As we've noted, Congressional Budget Office analysts quietly announced that they don't think the agency can accurately track those numbers in the face of endless tweaks, revisions and delays. Oh, and by the way, just because Obamacare enrollees have insurance cards -- and quite possibly a taxpayer-funded discount -- doesn't mean they're accessing care smoothly:

Patients and health care providers, in a series of interviews with The Huffington Post, complained that they are having trouble confirming that patients are insured, working out what their plans cover and figuring out which plans doctors will accept. These complaints are signs that the Affordable Care Act, President Barack Obama's signature health care reform law, is suffering growing pains more than six months since its insurance policies took effect...Maureen Mandel of North Bellmore, New York, has endured a gauntlet of troubles to get and use her new insurance since October, when she first tried to sign up through New York State of Health, her state's insurance exchange. Mandel, 47, spent countless hours on the phone with the exchange and her insurer, until her plan was finally confirmed in April...Mandel thought she had it sorted out. Then she went to the doctor. The front-desk attendant said some other physician was listed in the insurer's system as her primary care provider -- a doctor in Waco, Texas...These experiences soured Mandel, who described herself as politically liberal, on Obamacare, despite her appreciation for the coverage it provides and the tax credits that cut her insurance costs. "I haven't seen any improvement," she said, "and that's what scares me."

Perhaps many Americans are discovering that the federal government is ill-equipped to manage a massive health system overhaul, let alone fully run and administer an entire system. Speaking of which, for the latest on the VA scandal -- including revelations that nationwide lists of pending procedures were ordered purged -- click through.

UPDATE - The Associated Press reports on a new poll of Obamacare exchange enrollees (which represents a tiny pool of consumers). Though many within this group rate their new coverage highly, roughly 40 percent are still struggling to make monthly premium payments, "despite the availability of generous subsidies." Just wait until they learn about their deductible requirements if and when they seek treatment.

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