Report: Obama admin congratulates itself on cutting subsidy-eligible enrollees’ premiums by an average of 76 percent
posted at 6:41 pm on June 18, 2014 by Erika Johnsen
The Department of Health and Human Services took on a quietly triumphant tone in releasing their latest ObamaCare report this week, gladly proclaiming that federal subsidies have helped to offset the prices of premiums paid by eligible ObamaCare enrollees by an average of 76 percent as evidence that ObamaCare is working. Since almost nine out of ten enrollees have been eligible for some amount of assistance, that’s a lotta’ discounts:
Premiums that normally would have cost $346 a month on average instead cost consumers just $82, with the federal government picking up the balance of the bill. …
It suggests that the federal government is on track to spend at least $11 billion on subsidies for consumers who bought healthcare 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. …
Obama administration officials Tuesday focused on the availability of affordable coverage for millions more consumers.
“What we’re finding is the marketplace is working. Consumers have more choices, and they’re paying less for their premiums,” Health and Human Services Secretary Sylvia Burwell said in a statement.
Which certainly sounds lovely, until you remember that “the federal government picking up the balance of the bill” actually means “taxpayers picking up the balance of the bill.” The estimated $11 billion in subsidies noted above only includes signups through the federal marketplace, and when you add in all of the states that ran their own exchanges, the cost could be more than $16.5 billion for this year alone — but the country can only absorb the collectivized/redistributed costs of ObamaCare up to a point, and those costs are only going to keep on rising. To name a few, those costs are coming in the form of fewer choices in terms of narrower networks and necessarily comprehensive plans (completely screwing over the young and healthy), larger deductibles, and of course, rising premiums, via a new study from the National Bureau of Economic Research:
We provide comparisons for purchasers of self only coverage in California and in 23 states with minimal prior state premium regulation before the ACA now using federally managed exchanges. Using data from the Current Population Survey, we find that the average prices increased by 14 to 28 percent, with similar changes in California and the federal exchange states; we attribute the increase primarily to higher premiums in exchanges associated with insurer expectations of a higher risk population being enrolled.
And an updated study from the Manhattan Institute examines premiums in 3,137 of the United States’ 3,144 counties, concluding that, on average, individual-market premiums are up by an average of 49 percent. As Peter Suderman at Reason aptly summarizes:
Relying on a 3,137 county comparison of the five cheapest individual plans available prior to Obamacare with the five cheapest plans through the exchanges, the study by health policy fellow Yevgeniy Feyman found that, on average, premiums were up 49 percent under Obamacare. Again, that’s an average, and it masks some variation—in New York, which had unusually restrictive, badly designed health insurance market rules prior to Obamacare, premiums are actually down quite a bit—but it indicates that the overall trend for unsubsidized premiums is up. …
To the extent that insurance is relatively cheap, 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.