“Obamacare” and Health Insurance Premiums

As a rule, I try to stay away from political discussions. As the saying goes, opinions are like assholes, everyone’s got one and they’re generally not pretty. More to the point, quoting Despair.com, politicians are like diapers; they need to be changed often and for the same reason. But every once in a while I hear something that just makes me shake my head. Last week it was the “I was vegan for a month” article. Yesterday it was this doozy. “I’m planning to vote for Trump because Obamacare has made my health insurance too expensive”. Ugh. Really? I get that I have a little more time on my hands than most, but this is such a lazy and untrue thing to say, that I feel I have to share my 3 minutes of Google results.

When you first Google this, one of the leading political numbskulls of all time (mortifyingly from my own state), Michelle Bachmann, shows up prominently blaming President Obama:

We are seeing huge increases in these premiums, not only in the Obamacare exchanges, but in the private market. Because remember, a lot of times it’s the private market where we are getting health care through our employers. It’s the private market that has to offset government programs, whether its Medicaid or whatever government program. So the costs are going through the roof.

Not surprisingly, this is from a Fox News show. (Disclaimer, I copied and pasted the transcript. I can’t stand to listen to her talk, it makes my head throb.) It should go without saying that watching Fox News demonstrably makes you less knowledgeable about the world, but that’s not the point. The point is that Ms. Bachmann and her ilk can and do make these claims and most people are too lazy to do minimal fact checking.

Let’s back it up a bit. In 2009, the year that President Obama was inaugurated for the first time, this article ran in Time magazine, showing that health insurance premiums during the Bush administration had increased 131%. For those a little rusty on the math, if your health insurance cost you $2000 a year when President George W. Bush took office, it cost you $4620 when he left. To be sure, that’s setting the bar pretty high for President Obama. The same article noted that premiums were expected to increase 166% in the next decade.

But in 2015, right around the time Ms. Bachmann was spouting her inanity on Fox, this embarrassing piece was published by the insurance industry no less, showing just a 3.2% increase in health care premiums for 2015, the lowest increase in over 20 years. That doesn’t mean that insurance companies are taking that lightly, though. For an industry that is used to hiking rates 10% every year, a down year like 2015 where they just got a cost of living increase must seem like a disaster. And so, yes, health insurance companies are seeking huge premium increases for 2016, as reported in the New York Times. But let’s be clear, this is, pure and simple, corporate greed. It is not the Patient Protection and Affordable Care Act that raises premiums at all. It’s the companies that sell health insurance and who, for the most part, are accountable to their shareholders and not to their customers. The boom in profitability for health insurance companies is well documented here, here, here, and here.

So, as insurance companies charge more and make more, you pay more. I’m not really seeing the role of government in that sentence except as a barrier to keep the insurance companies from raising premiums too quickly. Prior to the ACA (“Obamacare”) health insurance companies were entitled to made as much profit as they could. The ACA capped that amount to 20% effective January 1, 2011. Other developed countries deliver their health care far more efficiently than the United States and have much lower administrative costs.

It is true that many people do have to pay much more out of pocket for health care than they used to. This is primarily due to the increasing popularity of high deductible health care plans that are associated with healthcare savings accounts (HSAs). But, again, making people more accountable for their health care spending decisions, while not a terrible idea, isn’t really a particularly Democratic solution, nor does it sound like a part of the Affordable Care Act! It does have a decidedly Republican ring to it and, lo and behold, the HSAs were legislated by President George W. Bush in 2003.

So, what have we learned?

  1. health care insurance costs were going up at least 10% every year during the last Republican administration
  2. health care insurance costs have gone up much less since the passage of the Affordable Care Act
  3. a large majority are paying more “out of pocket” money for health care
  4. health insurance companies are making more profit than ever before

Three finals thoughts on the Affordable Care Act.

First, we should all be immediately suspect when someone blames something on “Obamacare”. It’s an easy scapegoat because so very few people actually know what the legislation does. I’ve found the best response to be “what, in particular, is there about the Affordable Care Act that you find offensive?”. I have yet to find a single person who claims to “hate Obamacare” that can elucidate a single part of the legislation that they don’t like. Most, in fact, like most of the changes that have been made, if you ask directly.

Second, for those who are interested but don’t want to read the entire legislation, which is daunting, I’d strongly recommend Inside National Health Reform by John E. McDonough. Entertaining, readable, and will give you great insight into the Affordable Care Act and how it was passed.

Lastly, for those who never knew or have forgotten, most of the key aspects of the Affordable Care Act are nicely summarized here. Might be worth 2 minutes to scroll through. Hell, it might just change your mind.

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