WH trying to pre-empt sticker shock on September premium increases
posted at 8:41 am on July 7, 2014 by Ed Morrissey
And well they might. Insurers got a close look at the profiles of the enrollees in the individual health-insurance market this spring, and they turned out to be sicker than projected, as the “young invincibles” took a pass on ObamaCare in 2014. That means that premiums will go up in the fall in order to cover the added expense of the higher-risk enrollments — and that has the Obama administration spin team working extra hard this summer to cover their rear ends just before the midterms:
Most state health insurance rates for 2015 are scheduled to be approved by early fall, and most are likely to rise, timing that couldn’t be worse for Democrats already on defense in the midterms.
The White House and its allies know they’ve been beaten in every previous round of Obamacare messaging, never more devastatingly than in 2010. And they know the results this November could hinge in large part on whether that happens again.
So they’re trying to avoid — or at least, get ahead of — any September surprise.
This assumes that the problems with ObamaCare only have to do with messaging. That’s only true to the extent that the previous messaging from the administration has been proven either entirely wrong or flat-out lies. “You can keep your plan” ended up as the Lie of the Year for 2013 when millions of people who already had insurance got kicked out of their existing plans for 2014, and forced to pay more for less coverage in many instances. Barack Obama had promised that his reforms would lower premiums by $2500 a year for a family of four, but premiums have skyrocketed since the passage of ObamaCare, and they’ll do the same again in September.
This isn’t a messaging issue at all any longer. This is a pocketbook issue:
With Democrats looking to hang on to Senate seats in many Republican-leaning states, they’ll be hoping that the final numbers don’t come in anywhere near the 24.6 percent hike that report from the anti-Obamacare Heritage Foundation projected for a family of four in Arkansas, or even the 13.1 percent increase in Alaska or 12.4 percent in Louisiana.
So far, although no state has finalized its rate, 21 have posted bids for 2015. Average preliminary premiums went up in all 21, though only a few by double digits.
Remember how ObamaCare was supposed to “bend the cost curve downward”? Good times, good times. And the real problem for the White House won’t be the second round of price increases in the individual markets this fall. It will be the price spikes in the employer-based group markets, which will impact tens of millions of Americans. Businesses will have to start planning for those premium hikes in the next few weeks, and the increases in premiums, co-pays, and reductions in coverage and/or provider networks will be apparent to these voters at the beginning of October — a month or so before the midterms.
The White House can prep the spin all it wants, but they shot their credibility with the “you can keep your plan” and “cost curve” promises long ago. Spin won’t help to do much but artificially raise the morale of the True Believers, a circle that grows smaller and smaller as time wears on, as Obama’s approval ratings demonstrate.
Meanwhile, the entire subsidy structure might collapse today or this week at the appellate court … but don’t count on it:
The U.S. Court of Appeals for the D.C. Circuit is expected to rule any day now in a lawsuit that aims to block the law’s insurance subsidies in more than half the country. If the challengers ultimately prevail, the Affordable Care Act’s complex framework could begin to unravel as millions of people lose financial assistance.
For now, the stakes are a lot higher than the odds of success—challenges to the insurance subsidies have a 0-2 record in federal courts. But the pending D.C. Circuit ruling may be the one to break that streak, according to legal experts on both sides of the issue.
A three-judge panel heard oral arguments in the case, Halbig v. Sebelius, in March. Two judges appeared to split along partisan lines, leaving Judge Thomas Griffith, a George W. Bush appointee, as the likely swing vote. Griffith seemed during oral arguments to at least be open to the challengers’ arguments, and perhaps leaning in their direction.
A ruling against the Obama administration wouldn’t immediately damage the Affordable Care Act, and it wouldn’t mean that the administration will ultimately lose. But it would give the challengers their first victory and ensure that the issue keeps moving through the courts.
Allahpundit and Gabriel Malor have already addressed Halbig, so be sure to read up on their primers. It seems unlikely that the court will overturn the exchanges based on the differences cited by the plaintiffs in this matter, but it’s still possible. The overall intent of Congress in the ACA was clearly to make subsidies available nationwide, and there seems to be little reason to consider the federal exchange out of bounds when the thrust of the ACA was to federalize control of the health-insurance market. Stranger things have happened in courts, though, like … calling the nation’s first peacetime command economy mandate a tax. The Origination Clause complaint has a chance along those lines, although also a long shot. I’m just not sure which is the longest long shot.