Remember how Republicans and their media allies were telling everyone to that under Obamacare their insurance premiums were going to skyrocket? Last April, Fox News offered this headline:
Survey shows ObamaCare sending premiums rising at fastest clip in decades
The story proclaimed that an 11 to 12 percent increase in premiums under Obamacare, based on a survey conducted by Morgan Stanley, was the “largest increase in decades.” But data from the non-partisan Kaiser Family Foundation says otherwise.
On average, premiums increased by 5.9 percent in the employer-based market since the Affordable Care Act was signed into law. That is compared to an average increase of 4.8 percent in the five years before the law went into effect. Also worth noting, is that after a spike in 2011, the rate of increase in premiums has been lower every year. As for the claim that premiums are rising “at fastest clip in decades?” In the individual market, the annual premium increase the year before Obamacare took effect was 15 percent. In 2010, Kaiser found that individual market premiums increased by an average of 20 percent.
Twenty-two states have released data on premium increases in their state exchanges for 2015. According to the Health Research Institute, the average rate increase across those states is 8.2 percent. Louisiana is one of the two outliers (the other is Indiana), reporting premium increases averaging 19.3 percent. But worth noting in the data for Louisiana is this comment: “Louisiana is only reporting bids from insurers that are requesting 10% and higher rate increases at this time.” Is it possible that Louisiana is fudging their data due to the state being run by Obamacare hating governor Piyush “Bobby” Jindal?
Insurance premiums increase every year. Thanks to Obamacare, those increases are being brought under control, in part due to the “Medical Loss Ratio” rule that requires insurers to spend 80 percent of all premium dollars collected for the cost of care. (That number is 85 percent for the large group market.) Insurers are being forced to keep premium increases at a reasonable level, as any money they collect that puts their health care expenditures at less than 80 percent will be refunded to consumers.
While there is no denying that a small number of individual market insurance consumers are seeing large premium increases, for a variety of reasons, most are doing much better under Obamacare than they were before the law was passed. Anybody who tells you that Obamacare is bringing massive, unprecedented increases in insurance premiums is simply lying.