A reminder: Warnings about premiums going up under Obamacare were correct

We told you so. But so did analysts from the left and center.

The blogosphere is alive with the sound of Obamacare sticker shock.  The stories abound.  There are winners and losers with Obamacare, as was always promised.  Some people have to pay more, so that others may pay less.  Some people have to pay more so that things they may not even want will be covered (e.g., mental health and maternity services).  Plenty of people who didn’t bother to check into their health-insurance future before now are getting that letter from the insurance company, informing them that their insurance package of choice will no longer be offered after 31 December (it doesn’t comply with the Obamacare standards for coverage), or that their premiums will go up by 40%, 74%, or 107%.  Or more.

This poignant reader comment from the California Report website is typical:

Ocare complaints 

Well, dear, you’d get it if you had listened to the numerous commentators who warned weeks, months, or even years ago that the provisions of the 2010 Affordable Care Act would force premiums to go up.  Those warnings weren’t a “mythical” scare-narrative concocted by The Evil Right.  They were based on realistic analyses of what it will take to pay for the mandates in the ACA legislation.

A study by the Manhattan Institute, released in September 2013, predicted that premiums would rise significantly for younger, healthier customers under Obamacare.

A study sponsored by Center Forward, released in May 2013, predicted that individual-market premiums in six states (Arizona, Florida, Illinois, New Jersey, Ohio, and Wisconsin) would rise by an average of 40% under Obamacare.

Kathleen Sibelius warned in March 2013 that some premiums would have to go up:

… while the changes are expected to lower costs for women, older beneficiaries and the sick, men and younger, healthier people will likely see higher rates as insurers try to hedge against continued risks.

“Women are going to see some lower costs, some men are going to see some higher costs. It’s sort of a one to one shift … some of the older customers may see a slight decline, and some of the younger ones are going to see a slight increase.”

Insurance premiums could rise for some with individual plans, she said, as Obama’s Patient Protection and Affordable Care Act enhances the level of coverage and either eliminates or reduces the rate of price discrimination against people who are older, female or have preexisting medical conditions.

From the same Reason.com article:

Sebelius says that the hikes involved will be “slight,” but insurance industry representatives have suggested otherwise. And as Reuters notes, a study released this week by the Society of Actuaries projects that on average, individual premiums will rise by 32 percent across the country over the next three years. 

In December 2012, Aetna CEO Mark Bertolini predicted that premiums would rise by as much as 100% under Obamacare.*

In 2010, MIT economist Jonathan Gruber, a principal architect of the ACA, was contracted by three states (Colorado, Minnesota, and Wisconsin) to predict the impact of the ACA on their health-insurance markets.  As noted by the Daily Caller in February 2012, Gruber’s reports predicted a typical premium increase of between 31% and 34% for young, healthy customers covered in the individual insurance market.  (H/t: FrontPage)

Daily Caller has Gruber’s assessment for Wisconsin (dated 2012) available online, and it includes the following predictions (emphasis added):

— 59% of individual-market customers will see a premium increase, after tax credits

— The average premium increase will be 31% over the first three years of ACA implementation, after tax credits

— By 2016, the current Wisconsin individual (non-group) market for health insurance will decline from 180,000 customers to 30,000 (basically, due to its unaffordability, for both insurers and customers, under the new rules of the ACA)

— 136,000 of that difference will migrate to the Obamacare exchange – which is where the customers will see the premium increases

— Individuals ages 19-29 will see an increase of 34% in premium costs on the Obamacare exchange individual market

— Individuals ages 55-64 will see a 1% decrease in premium costs on the Obamacare exchange individual market

— Families of two or more will unvaryingly see an increase in premium costs on the Obamacare exchange market, ranging from an increase of 12% for two insured to an increase of 28% for four or more insured

— Wisconsin employers will drop employer-provided insurance for 100,000 workers

One could go on, but you get the point.  The information has been out there.  It’s been coming from sources not affiliated with the political right.  ThinkProgress and Media Matters may have pooh-poohed the predictions, depicting them as arising from right-wing hysteria, but in fact, left-wing proponents of Obamacare, including architects of the program, along with self-identified political “moderates,” have been saying all along that premiums will have to go up – and have to go up a lot, for some people.

You may feel that you, personally, aren’t rich enough to be targeted for higher premiums.  You’re just a healthy, non-elderly guy or gal who earns a bit too much to get a subsidy.  In that case, your only hope of prior warning – warning geared to alerting you that you’d fall into the disadvantaged group – probably was the right-wing commentariat.

The relatively accurate predictions from Obamacare proponents about rising premiums have focused on averages, as Media Matters’ “15 myths” article did on 1 October (same as link above).  That focus is misleading, if you’re a healthy, self-reliant full-time earner.  The impact of Obamacare on premiums is disparate: higher and disadvantageous on you, lower or advantageous on others.

You’ll have to decide how you feel about that: about realizing that you, non-wealthy and ordinary as you may be, are the money sump from which Obamacare proposes to pump.  As you ponder the matter, consider that other people – people you may have thought were stupid or hysterical – already understood that.  Yeah, plenty of them are out here saying they told you so.  It sounds like gloating to you, because a lot of it is, and it’s annoying.

But they were right.  They’ll keep being right: because they understand market economics; because they familiarized themselves with the available information about the ACA; because they know history and its lessons about human nature and collectivist ideas.  You can listen to them, and understand beforehand where things are headed, or you can keep thinking they’re stupid and hysterical, and keep being unpleasantly surprised.  Remember that.


* Note the points entered at the end of the MoneyNews report on Bertolini:

The CBO estimated that the law will prompt individual premiums to increase 10 to 13 percent. After including subsidies, individual premiums will decline about 60 percent.

What the report doesn’t make clear is that the CBO numbers (from a 2009 analysis) are obtained by averaging the impacts across customer groups.  Some customers – younger and healthier ones – see much higher premium increases than 10-13%.  The “decline of 60 percent,” with subsidies (or tax credits), is actually a decline of 56-59%, which applies only to a select segment of the insurance enrollees with incomes between 133% and 399% of the federal poverty level.  That segment is estimated to encompass about 18 million of the exchange customers, and their premium decline will vary widely from nearly 100% to 1-2%.  Almost no one will see a decline of, literally, 56-59%.

Additional observations made by Ed Morrissey on the 2009 CBO analysis are here.

J.E. Dyer’s articles have appeared at Hot Air, Commentary’s “contentions,Patheos, The Daily Caller, The Jewish Press, and The Weekly Standard online. She also writes for the new blog Liberty Unyielding.

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13 thoughts on “A reminder: Warnings about premiums going up under Obamacare were correct”

  1. Obamacare,, make room for the debt ceiling

    The American debt junkie is having a moment of clarity, her self esteem (the Tea Party) is trying to revolt against her controllers, and she’s starting to get the DT’s from refusing another dose.

    Her debt pushers, loan sharks, and pimps are starting to get nervous.Good.

    Republicans should stick to their guns on Obamacare and the debt ceiling.. A default now is healthier in the long haul than a continuation of this slow death by debt addiction..

    Detox ain’t easy on an addict, but it’s the only way to help get her life back and out of the gutter.

    1. “Republicans should stick to their guns on Obamacare and the debt ceiling.. A default now is healthier in the long haul than a continuation of this slow death by debt addiction..”

      That presumes that the republican establishment is interested in the long term economic health of this country. That is manifestly untrue. What they want is the maximum sustainable indebtedness that America can support.

      1. I’m not counting on the Republican establishment to pull this off GB. They act as a weather vane in a swirling wind. The conventional wisdom would say that critical mass hasn’t been achieved yet on the right, ergo this revolt will fail. That’s probably true, but my intuition tells me this is an opportune time to take this to the extreme. The original American Revolutionaries, eventually came to power in a society where the majority was mostly satisfied with the colonial status quo. The Republican establishment, along with a good portion of middle income Democrats can be turned by utilizing the proper political and economic tools. It isn’t coincidental that banksters and welfare queens alike, are freaking out to the same degree at the thought of a termination of the gravy train. For me, that’s proof enough that sticking to this is the right thing to do.

        I’m usually in favor of compromise, cooperation and consensus in life, but not on this issue. I hope the base puts a (metaphorical) gun to the Republican establishment’s head. And if they dare cave.. pull the trigger.

        1. I won’t be the least bit surprised if Boehner blinks first and caves. That said, he may have calculated that, despite the certainty that the MSM will continue to blame the Republicans, refusing to raise the debt ceiling is a calculated risk worth taking.

          As I’ve thought more deeply about this and read more widely, I’ve come to realize two important factors; first, the payment on the debt is about $20 billion a month and the Federal revenues are at $250 billion a month, so the money is there to pay on the debt without raising the debt ceiling. In addition, it’s a constitutional obligation to make payments on that debt and if he unilaterally decides to default on the debt, it’s all on his shoulders, he’d be unable to avoid responsibility for an unnecessary default. Unilaterally, vindictively and unnecessarily defaulting on the debt is political suicide for the dems. It would create an irreparable break between Obama and his democrat congress.

          Secondly, refusing to raise the debt ceiling FORCES Obama to make spending cuts in Federal programs. If the debt payments are made [mandated] and social security payments made (political suicide not to), then about 20% has to be cut elsewhere. No matter where he then cuts, the reaction will be outrage and he can’t escape responsibility for the choices he makes, as to whose ‘ox’ gets gored.

          Denying death benefits to fallen soldiers families while simultaneously giving 500 million to NPR and PBS is really bad PR and that’s just right now. It can only get worse, if he’s forced to cut spending.

          When he claims that republicans made him choose, he’ll come across as whining and his job approval numbers lower even further. The lower Obama’s job approval numbers in October of 2014, the harder it will be for democrats to retain much less gain congressional seats. This is all about the dems trying to regain the House in 2014 and if they can’t convincingly blame the republicans, Obama becomes a lame duck President and the left’s agenda is stalled on the legislative front.

          So currently, I’m for the republicans refusing to raise the debt ceiling without such huge concessions from Obama that his ego just won’t let him do it.

          The irony that Obama would be the one forced to make the spending cuts and can’t escape responsibility is too sweet for words.

          By refusing to raise the debt ceiling what the republicans are basically doing is taking away ‘the kids credit card’ and making them live on their ‘allowance’ 😉

  2. Vladimir Lenin asserted that,
    “Socialized medicine is the keystone to the arch of the socialist state.”

    Winston Churchill pointed out that,
    “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”

    Maggie Thatcher famously stated,
    “The problem with socialism is that eventually you run out of other people’s money to spend”

    Of course, when socialists “run out of other people’s money” they simply assert that ALL money belongs to the people and confiscate everything to the state, as France’s 75% taxation rate, that almost nine out of 10 Scottish households take more from the public purse than they contribute in taxes and the recent EU seizure of Cyprian bank accounts demonstrate.

    And lest one think that what happens in Europe cannot happen here there’s, “Feds Seize Family Grocery Store’s Entire Bank Account” http://ij.org/miforf
    “Federal civil forfeiture law features an appalling lack of due process: It empowers the government to seize private property from Americans without ever charging, let alone convicting, them of a crime. Perversely, the government then pockets the proceeds while providing no prompt way to get a court to review the seizure.”

    Civil Forfeiture Law was instituted to combat drug lords but there is NOTHING to prevent a lawless administration from using it to attack those on the right, just as the IRS targeted conservative groups. If the dems regain the House watch for their use of civil forfeiture law to skyrocket.

    “Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.” Alexis de Tocqueville

    None of this is new, no less a leftist than Friedrich Nietzsche himself stated,
    “Liberal institutions straightaway cease from being liberal the moment they are soundly established: once this is attained no more grievous and more thorough enemies of freedom exist than liberal institutions.”

    “We can’t expect the American People to jump from Capitalism to Communism, but we can assist their elected leaders into repeatedly and gradually giving them small doses of Socialism, until they awaken one day to find that they have Communism.” – Nikita Khrushchev

    de Tocqueville also warned that,
    “The American Republic will endure until the day Congress [or a political party] discovers that it can bribe the public with the public’s money. A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.”

    “‘Bread and Circuses’ is the cancer of democracy, the fatal disease for which there is no cure. Democracy often works beautifully at first. But once a state extends the franchise to every warm body, be he producer or parasite, that day marks the beginning of the end of the state. For when the plebs discover that they can vote themselves bread and circuses without limit and that the productive members of the body politic cannot stop them, they will do so, until the state bleeds to death, or in its weakened condition the state succumbs to an invader and the barbarians enter Rome.” R.A. Heinlein

  3. “Civil Forfeiture Law was instituted to combat drug lords but there is NOTHING to prevent a lawless administration from using it to attack those on the right, just as the IRS targeted conservative groups.”

    Agreed. That’s the case with many aspects of law — and usage as well, as when the president assumes the executive power to assassinate the family members of terrorists, even if the terrorists and their family members are US citizens. That’s the sort of thing Americans MUST remember when Democrats call law-abiding citizens “Tea Party terrorists.”


    I wouldn’t be surprised to see Boehner cave either, GB. But neither would I be surprised to see a different outcome. Where I disagree with the Beltway pundits is on characterizing the situation we’re in at the moment. I don’t think it’s “1995 redux.” I think we are in uncharted territory.

    The fact that the GOP leadership backed into it without a plan has been understandably alarming to critics like our shipmate cavalier. I don’t disagree that the scattershot, planning-deficient approach has been problematic, and that it would have been preferable to have a unified, coordinated plan.

    But I don’t think anyone can say with certainty how this thing is going to come out. The optics are as bad for Obama as for the House Republicans, and there are ways they could get worse for Obama.

    The much-discussed figure of “$30 billion” being all the cash the current US account will have to spend after 17 October is a figure that comes from using projected revenues and authorized debt (i.e., staying with the current cap) to pay the military, service the national debt, and send out Social Security and federal pension checks. When the politicians say they’ll be unable to “pay our bills,” they mean doing other things BESIDES that list.

    In fact, the funds are there to keep the SS and federal pension checks going out through the end of FY2014, without raising the debt ceiling. Obama would literally have to intervene to prevent those checks from going out. They are already authorized and not affected by the debt ceiling date. It’s new current-account spending under continuing resolutions that is affected by the debt ceiling.

    The funds to service the debt and pay the military will also be there, given the projected revenues. There will be a limited amount available to pay for other federal services, like food stamps, community redevelopment, military training and maintenance, FBI and Border Patrol operations, IRS activities, etc. If we pay for at least some of those things, the funds will NOT be there to invest in green-energy companies, or to bomb Syria.

    A key risk Obama courts is of too many people realizing that their lives haven’t fallen apart, when Obama has to make the only politically acceptable choices about where to cut government operations. That’s why his departments are engaging in all the spiteful activity with the “national park” closures. (As, of course, you know. I’m really writing this for other readers.) Obama’s executive leadership is worried that middle-class Americans won’t be hurt enough by the shutdown to turn against the Republicans — that people who actually work and pay for their own lives will shrug the shutdown off instead of being petrified by it.

    In the unfolding game of chicken, a key question is whether Obama thinks he can hang it around the Republicans’ necks, if he decides to intervene and cut off SS or federal pension payments (especially military pension payments, which affect over 7 million beneficiaries). I don’t think we know the answer to that. I do think he would have to be more prepared than his administration looks right now to clamp down on the blowback, if he wants to take that risk.

    He could choose other ways of tightening the screws also, such as standing down the Border Patrol, limiting or terminating immigration services (affecting scheduled travel), shutting down air traffic by terminating ATC and TSA services, shutting down Amtrak, etc.

    The bottom line is that going nuclear on this is in his hands. Congress can’t actually make the decision; only he can make it. Is he ready to make that leap? I just don’t know. I hope not. I kind of think at some point, he’s going to realize that he’s not ready for the thermonuclear option right now, and in the interest of staying on the current path with Obamacare — which you rightly characterize as the path to collectivism and complete destruction of the American spirit — will find a way to offer Boehner something he can agree to. Up to now, Obama has refused to do even that. But he can remain on the incremental “nudge” path if he modifies his current approach. That seems more in character for him than provoking an epic decision point.

    1. It is a mistake for anyone to try and slow down Obama Care.
      Let it play out.
      It will turn out to be a bomb vest locked on the Kenyan.
      I repeat, the young and healthy will pay the penalty even as it increases.
      People will be in the streets when the IRS starts the heavy handed stuff.
      Federal Employees and our rulers still have a very special insurance deal.
      2014 elections could prove to be quite amusing.

      1. Whole lot of people going to be hurt by Obamacare playing out. I can’t reconcile it with my conscience to sit by cynically and not care about their pain — even those who have brought it on themselves by voting for Obama and other Democrats.

        There may well be real pain even for me and thee in the next three years. I can’t foresee it right now, at least not specifically, but if Obama “wins” this round, there’s no telling what he’ll do.

        I’m not convinced any calculations made today are correct about what the price will be, for any course of action we choose. I do think letting Obamacare play out will hurt worse than people imagine.

        1. Nothing substantial can be achieved at the moment.
          The Senate numbers and Presidential veto is a fact of life.
          I don’t like it either, but it is going to play out until November.

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