Health Reform: Since 2014, Democrats have greeted double-digit hikes in ObamaCare premiums with a yawn. Now it’s a crisis that must be fixed immediately. What’s changed?
Huge increases in ObamaCare premiums are the norm. In its first year, ObamaCare forced costs in the individual insurance market up by double digits. Subsequent eye-popping jumps followed. The average premium climbed about 7% in 2015, 11% in 2016, 22% in 2017, and by more than 30% in 2018.
The Health and Human Services Department calculated that, overall, premiums more than doubled between 2013 — the year before ObamaCare went into effect — and 2017.
Note that this doubling occurred while President Obama was in the White House (insurers announced their 2017 premiums in the summer of 2016).
The response from Democrats back then to these massive annual hikes in insurance costs?
They said they were temporary, because insurers initially underpriced their plans to attract customers and they had to make up for lost ground. Once ObamaCare markets stabilized, rates would too.
Mostly they argued that double-digit premium increases were no big deal because 87% of the people buying coverage in an ObamaCare exchange are getting subsidies, which effectively shield them from the rate hikes.
In 2016, an Obama administration spokesman said “we think they will ultimately be surprised by the affordability of the premiums, because the tax credits track with the increases in premiums.”
Obama even argued that rate hikes were a good thing, because they made more people eligible for ObamaCare subsidies, which are based on the cost of a “benchmark” silver plan.
“When benchmark premiums rise faster than expected,” one official report said, “more individuals are protected by (the premium subsidies).”
These comforting reassurances overlooked the fact that millions of people in the individual market aren’t eligible for those subsidies. They face the full brunt of those cost hikes.
We noted, in fact, that the uninsured rate bottomed out soon after the law took effect. It has been creeping back up recently, as insurance becomes increasingly unaffordable to working families.
So now the Congressional Budget Office is forecasting that average ObamaCare premiums will climb by 15% this year. If that’s true, it would be a break from the trend. In the context of ObamaCare, that’s actually good news.
Yet Democrats are suddenly taking notice of ObamaCare’s costs and demanding action.
Not, mind you, because they care about those families priced out of the insurance market. In fact, Democrats adamantly oppose even a modest proposal by Trump that would make low-cost non-ObamaCare insurance plans more widely available.
What Changed?
The reason Democrats care about premium hikes this year is because they hope to score political points before the November midterm elections.
As Senate Minority Leader Chuck Schumer put it, “Republicans and the Trump administration own any and all increases in health care premiums for American consumers.”
The truth is that ObamaCare’s premiums continue to skyrocket for the same reason they did in prior years. The law is unworkable.
ObamaCare forces insurers to cover everyone in the individual market at the same rate, no matter their risk of running up big medical bills. That’s fine for older and sicker consumers, but means jacking up premiums for the young and healthy.
The individual mandate penalty was supposed to force the young and healthy to buy coverage anyway. It never worked.
So, as a result, the risk pool became older and sicker, forcing premiums up for everyone. The multitude of costly benefit mandates only made matters worse.
This failing isn’t unique to ObamaCare. Every state that has tried these regulations in the past has suffered the same consequences. Which is why most abandoned them or watered them down.
Democrats know as well as anyone that ObamaCare was collapsing long before Trump took office, and they have no credible plans to fix it. All they’re looking for is a convenient scapegoat.