We heard time and time again from candidate Obama that he would “cut the cost of a typical family’s premium by up to $2,500 a year.” But as we inch closer to ObamaCare’s full implementation in 2014, it’s becoming abundantly clear that his promise won’t even come close to being true.
In reality, premiums are getting ready to skyrocket.
Staffers for the House Energy and Commerce Committee this week teamed up with the Senate Committee on Finance and the Senate Committee on Health, Education, Labor and Pensions to project just how much premiums should increases by state.
So how will Alabama fair?
According to the staffers’ estimates, Alabama’s premiums in the individual market are going to rise a staggering 61% thanks to the President’s healthcare law.
“Obamacare’s most onerous insurance regulations will directly cause insurance premiums to skyrocket, particularly in the individual and small group markets,” writes Alyene Senger of the Heritage Foundation.
According to Senger, while there are many provisions that will increase premiums, two will have the most expensive impact:
1. Age rating restrictions. Obamacare limits variation in premium costs to a ratio of 3 to 1 based on age. But as Heritage research shows, “The natural variation by age in medical costs is about 5 to 1—meaning that the oldest group of (non-Medicare) adults normally consumes about five times as much medical care as the youngest group.” This means that under Obamacare, young adults will pay significantly higher premiums than they would have prior to Obamacare, and older adults will pay only slightly lower premiums.
2. New benefit mandates and cost-sharing rules. Heritage expert Ed Haislmaier explains, “The new law adds a number of health care services that insurers must cover and in some cases restricts the ability of insurers and employer self-insured health plans to impose limits on the amount of services patients can consume. This combination will drive up health plan costs and premiums for both individual insurance and employer-group coverage.” In addition, Obamacare prohibits cost sharing on many preventative services, which will dramatically increase utilization of those services—pushing premiums even higher.
We must always remember the words of famous free-market economist Milton Friedman: “There ain’t no such thing as a free lunch.” In other words, it’s impossible to get something for nothing. Even when the government “gives” us something, we still pay for it with our tax dollars. Or in our case, our children and our children’s children will still pay for it in new debt.
It’s probably no surprise to any of us that ObamaCare isn’t at all it was cracked up to be. But with the bulk of the law not kicking in until 2014, this is probably just the beginning of ObamaCare’s broken promises.
