A pair of online health insurance cost trackers, released approximately six years after President Barack Obama signed the Affordable Care Act (ACA) into law on March 23, 2010, show health insurance premiums and deductibles offered on the Obamacare exchanges continue to rise in most states.
Freedom Partners’ 2016 Obamacare Deductibles Increase Tracker, released on March 3, measures the average change in price from 2015 to 2016 of Bronze, Silver, and Gold health insurance plans sold on Obamacare exchanges. A fourth column reports the weighted average price change across all plans offered in a state. Since 2015, average deductibles have increased in 41 states, the tracker reports. Deductibles in eight states rose by more than $500 on average, and Mississippi’s average deductible increased by $1,395.
The release of the deductibles tracker followed the January 11 debut of Freedom Partners’ 2016 Obamacare Premium Increase Tracker, which measures average premium increases in individual market exchanges for every state. Average premiums rose by double-digit percentages in 29 states, including 17 states in which average premiums rose by at least 20 percent, the tracker reports.
Christopher Press, an adjunct professor at Emory University’s Rollins School of Public Health and a former president of Blanchard Valley Hospital in Ohio, says higher health insurance costs are an unintended consequence of the ACA’s more popular features.
“There are some parts of Obamacare that are well-intentioned, in fact probably admirable and in fact probably good policy, but they come with a lot of unintended consequences or unavoidable consequences,” Press said.
The law’s “community rating” requirement for insurance companies is a prime example of a problematic unintended consequence resulting from the ACA, Press says.
“Community rating means you can’t rate an individual based on their [health] experience, because that’s the problem that causes people to pay exceptionally high or exceptionally low bills, so you take a general population and you rate the community [instead],” Press said.
Press says spreading risks across an insured group is generally helpful, but the minimum coverage the ACA requires insurers to offer makes plans more expensive.
“You’re spreading your risk to others, which means you’re taking others’ risk,” Press said. “So that’s a positive thing, but when you mix that with all these mandatory coverages, now you have minimum required coverage, and that has to get baked into the price somehow.”
Nathan Nascimento, a senior policy advisor at Freedom Partners, says ACA’s results contradict Obama’s promise Obamacare would make insurance more affordable.
“In terms of the Obamacare exchanges, it’s the exact opposite,” Nascimento said. “Obama said he was going to lower your health care premiums. Your costs were going to be more affordable. He said that you would be able to keep your doctor. Everything Obama said is the exact opposite.”
Nascimento says rising premiums and deductibles are a natural outgrowth of the ACA’s interference with the market.
“I think broadly we can say that this is a phenomenon by taking a look at the very premise of the Affordable Care Act, which is to manipulate the health insurance marketplace by forcing insurance carriers to offer artificially low premiums to people and mandating that everyone participate with health insurance,” Nascimento said.
Middle-Income Earners Pay Out
Nascimento says the promises made by ACA’s proponents clash with basic economic principles.
“It’s simple economics,” Nascimento said. “For every action in the marketplace, you’re going to get an opposite reaction. So those costs have to go somewhere.”
Some of those costs went to Press and his wife, whose combined Bronze plan premium rose 19 percent in one year, from $1,037 in 2015 to $1,231 in 2016.
“I never thought I’d look forward to Medicare,” Press wrote in an op-ed for The Wall Street Journal on March 7. “If I were eligible today, my premium would be $122 a month, about one-tenth of my current premium. I have 21 months to go.”
Nascimento says rising insurance costs hit middle-income earners hardest.
“The people who are taking this on the chin the worst are folks that are in the middle class who don’t qualify for these subsidies and certainly don’t have as much disposable income as someone who has more cash or has a greater income,” Nascimento said.
Kimberly Morin ([email protected]) writes from Brentwood, New Hampshire.
2016 Obamacare Deductibles Increase Tracker, Freedom Partners, March 2, 2016: http://freedompartners.org/latest-news/2016-obamacare-deductible-increase-tracker/
2016 Obamacare Premium Increase Tracker, Freedom Partners, January 10, 2016: http://freedompartners.org/latest-news/2016-obamacare-premium-increases/