Is Obamacare making insurance less expensive or more?
If you wonder whether a number means anything, see if it’s presented in any kind of context. If not, that’s usually a sign you’re being had.
That was my first thought this past week when the federal government released its "Marketplace Affordability Snapshot" for health-insurance plans sold on the Obamacare exchange. The feds reported the increase in premiums for a "benchmark" plan for each of the 37 states where plans are sold on HealthCare.gov, including Georgia.
Notably absent were any similar figures for prior years. That makes it hard to know exactly what to make of the news that, for instance, the premium for Georgia’s benchmark plan will be 6.1 percent higher in 2016 than it was this year. Is that good or bad compared to the days before Obamacare?
As you might have guessed from the lack of context in the government’s report: It isn’t good.
Inconveniently — or maybe conveniently, depending on your political persuasion — comparable data are hard to come by. The benchmark plan is the second-cheapest of the plans in the “silver” category, which represented about 3 in 4 Obamacare plans sold in Georgia this year. But that kind of plan didn’t necessarily exist before the exchange was launched two years ago.
So let’s recall the reasons Democrats gave us Obamacare. Among them were large annual increases in insurance premiums for many Americans. You may vaguely remember these as having been in the double-digits. But by and large, those figures were for employer-sponsored insurance, which is how most privately insured Americans get their coverage, not the individual market the exchange covers. And the increases varied widely by state.
The best state-by-state comparison data I could find for the individual market come from the Kaiser Family Foundation, which reports annual average premiums from 2010 to 2013. That's not exactly apples-to-apples, but it is useful in that it tells us what was happening to prices in the individual market — which Obamacare aimed to improve — in the years right before the law took effect. (The Centers for Medicare and Medicaid Services, which produced the report, could not provide me with more-comparable data.)
Here’s what I found:
- Of the 37 states on the federal exchange, 30 will see a larger percentage increase in the benchmark plan in 2016 than the annual average change between 2010 and 2013.
- In 22 of those states, the increase in 2016 is larger than every annual increase during the previous time period. In eight others, only one of the previous years saw a larger increase than 2016 will bring.
- In Georgia, the average individual-market premium actually fell each of those previous years, with an average decrease of 5.2 percent — compared to the increase of 6.1 percent in 2016.
Is this supposed to be an improvement?
This context underscores what some of us have said all along: Obamacare isn’t making care more affordable by reining in prices. To the extent more Americans can afford insurance, it’s because more people are on Medicaid, while others are getting large subsidies to buy private plans — subsidies that wouldn’t have to be so large if Obamacare hadn’t driven premiums higher.
Not that you’d know all that from seeing a single year’s data points, in a single report, issued in a vacuum.
