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ACA Revisionism
Under ACA, Premiums Rise by 28 Percent

Sticker shock is back. Obamacare has raised premiums, on average, by 14–28 percent nationally, according to a new study by the National Bureau of Economic Research. That’s a big hike in a market that was already seeing year-on-year increases before Obamacare went into effect. Vox responds to these numbers by noting that the estimate doesn’t take federal subsidies into account. With subsidies, many individuals will find health care affordable even under the hikes.

So everything is peachy-keen, right? Not so fast. Those subsidies, of course, come from the taxpayer—and yesterday the LA Times reported that taxpayers will be on the hook for more than expected. In April the CBO announced that the law would cost less than originally predicted, in part because of narrow networks and in part because fewer people were getting insured than expected (and therefore subsidy costs were lower). We now know that estimate was wrong. The April report pegged subsidy costs at $10 billion, but now they look more like $16 billion.

Subsidies, then, may help lower-income people deal with expensive premium increases, but the nation as a whole can only bear the burden of rising costs for so long before the system collapses. This seems obvious enough, but the punditry continues to busily debate the particulars of how Obamacare goes about propping up an expanded version of the pre-ACA system. Meanwhile, the problems at the heart of that system will continue relentlessly driving up costs.

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  • grinlap

    “on average, by 14–28 percent”


    “a single value (as a mean, mode, or median) that summarizes or represents the general significance of a set of unequal values”

    The key thing here is that an average is a SINGLE VALUE. You’re contradicting yourself when you refer to an average then give a range.

    Sorry, pet peeve. One of many.

    • Andrew Allison

      I agree. Incorporating “. . . , on average,” when reporting a range of values is unforgivable. I trust that the responsible party will be consigned to the TAI dungeon and suitably re-educated [/grin]

  • qet

    A couple of days ago Krugman proclaimed in the NYT that the ACA was a world-historic achievement of this world-historic President. He tossed out various numbers, not one of them a cost figure. The left-liberal belief is that the GOP has resisted federal government health insurance schemes (except of course the GOP has expanded Medicare, hasn’t it?) solely because the GOP hates poor people and does not think them deserving of health care, when of course the actual reason is one of cost. The GOP is as willing to buy votes as the Democrats, had we but the money. Cost means nothing in Krugman’s evaluation of the ACA’s merits.

    It was known all along that the federal government would have to subsidize most ACA enrollees, and the left happily used the most egregious estimates, proclaiming them “evidence” that the GOP chose to ignore for ideological reasons as is its wont. The really amazing thing is that out in blogland, commenters everywhere swallowed these faked numbers whole and really committed themselves to faith in them, while the salesmen of the ACA–the Krugmans, Kleins, Yglesias’ and the rest–always knew the numbers they were pushing were faked.

    • Boritz

      Yes. &nbspAnalysis of ACA and a host of New Society Great Deal programs works best if you approach it as a benefit-benefit study.

  • Andrew Allison

    You must be mistaken! In addition to keeping your doctor, Obamacare promised to reduce premiums (despite the fact that elimination of pre-existing condition consideration makes this nonsensical)? At least you acknowledge that the subsidized premiums being paid for by the taxpayer do not reflect a reduction in the cost of healthcare. One can only hope that the price of, “pass it so that we can find out what’s in it” will be on full display come November, and that those who did so will be held accountable.

  • lhfry

    This is the same problem as Medicaid expansion. Many complain that the states that declined to do it won’t have to pay for it – the Federal government will. But it doesn’t really matter “who” pays for it, because it all has to come out of the same pockets. Taxpayers will pay either to their state governments or to the Federal government. Widespread ignorance is a huge problem. Wasn’t there a poll a few years back that found that many people believe that “the government has its own money?”

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