Obamacare Premium Hikes Worse Than Thought

House Speaker Paul Ryan (R-Wis.) brushed aside a Congressional Budget Office report predicting a reduction in the insurance rate if a GOP health bill becomes law, arguing Thursday that this week provided fresh evidence Obamacare is failing.

At a news conference, Ryan pointed to this week’s announcement by Blue Cross and Blue Shield that it is pulling out of the Affordable Care Act exchanges in 32 counties in Kansas and Missouri.

“Remember when President [Barack] Obama promised that his health care plan would lower the typical family’s premiums by up to $2,500?”

Ryan also seized on new government data suggesting that the widely reported premium increases under Obamacare are worse than people realized.

“Since Obamacare went into effect, average premiums have more than doubled nationwide,” he said. “Remember when President [Barack] Obama promised that his health care plan would lower the typical family’s premiums by up to $2,500?”

Instead, Ryan said, those premiums have increased by almost $3,000.

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In the Obama administration, the Department of Health and Human Services measured premium changes by examining the cost to a single person buying the second-cheapest “silver” plan, compared to the first year Obamacare was in effect in 2014.

This week, the department compared average premiums to data on the individual market in 2013,  the last year before the Affordable Care Act took effect. Those statistics show that the average premiums in the 39 states that use exchanges run by the federal government jumped by 105 percent, with a median increase of 108 percent.

The average premium increased from $232 to $476. Premiums doubled in 62 percent of the states.

[lz_table title=”Skyrocketing Obamacare Premiums” source=”Centers for Medicare and Medicaid Services “]States with highest increases since 2013
|State,Increase
Alabama,223%
Alaska,203%
Oklahoma,201%
Arizona,190%
Tennessee,176%
North Carolina,176%
|
|States with smallest increases since 2013
|State,Increase
New Jersey,12%
New Hampshire,32%
North Dakota,44%
Maine,55%
Indiana,74%
Kentucky,75%
|
|National Average*,105%
|
*39 states using federal exchange
[/lz_table]

“It’s not a surprise,” said Drew Gonshorowski, a health policy expert at the conservative Heritage Foundation. “But it’s sort of what I’ve been talking about for a long time.”

The Obama administration justified using 2014 as the baseline because the law so fundamentally changed the insurance market that using pre-Obamacare premiums made for an apples-to-oranges comparison. But Gonshorowski said 2013 is a better baseline because it captures the full impact of the law.

“If you’re only looking within the ACA, it made it appear not as bad as it was,” he said.

Rep. Mo Brooks (R-Ala.), whose state has experienced the steepest premium increases since 2013, called the report “sobering” and argued it is more proof that the Affordable Care Act is imploding.

“Obamacare damaged Alabama more than any other state in America,” he said in a prepared statement. “In Alabama, health insurance cost increased a staggering and obscene 223 percent. That is not a ‘first’ Alabama citizens want or can afford. Alabama’s skyrocketing health insurance cost increases severely undermine the ability of Alabama citizens to access health care and take care of their own families.”

In addition to Alabama, 23 other states have premiums that are least twice as high as they were in 2013. The state with the smallest increase is New Jersey, where premiums on average rose just 12 percent.

Gonshorowski said that states that already had heavily regulated — and costlier — insurance markets generally saw smaller increases than states with fewer restrictions and requirements.

Importantly, the government data do not include the premiums people pay after receiving subsidies available for families earning up to 400 percent of the federal poverty line. As a result, the vast majority of healthcare.gov customers largely are shielded from the impact of the rapid premium hikes, even as wealthier customers get hammered and government costs rise.

Gonshorowski said that makes the political reality difficult for the GOP as the bill moves to the Senate, where Republican senators already have vowed to make major changes.

“This is one of the biggest issues we run into for any subsidy for anything,” he said. “It’s difficult to take anything away from anyone.”

But Ryan argued that the current law simply is not sustainable because insurance companies are incurring too many losses. He noted that the Blue Cross and Blue Shield pullout in Missouri and Kansas will impact 67,000 people.

“A new shoe drops every week under Obamacare, it seems,” he said. “This is exactly why we are on a rescue mission.”

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The American Health Care Act allows states to seek waivers to repeal some of the Obamacare regulations. The Congressional Budget Office on Wednesday predicted that premiums in states that made moderate changes would be 20 percent lower in 10 years than under current law.

Democrats increasingly seem to be growing disenchanted with Obamacare as well, but they are moving in the opposite direction. Rep. Keith Ellison (D-Minn.), the vice chairman of the Democratic National Committee, said at a news conference Wednesday that it would be “good politics” to run on a platform next year of government-run health care. He endorsed a bill by Rep. John Conyers (D-Mich.).

“We can fight fiercely to protect the Affordable Care Act and also look a little bit farther in terms of establishing Medicare for all,” he said. “It’s not the proper role of me at the DNC to tell people what they’re going to stand for. That’s a choice the candidates make for themselves, but I recommend that you win your election, and I think a good way to do it is to support Conyers’ bill.”