Economy Alarm: “Buyers Beware”: Premiums to Rise Under the Democrats’ Healthcare Takeover
March 17, 2010
“Buyers Beware”: Premiums to Rise Under the Democrats’ Healthcare Takeover
Despite Promises, Premiums Will Go Up
President Obama Promised Lower Premiums Under the Democrats’ Healthcare Takeover
“‘You’ll be able to buy in, or a small business will be able to buy into this pool,’ Obama said. ‘And that will lower rates, it’s estimated, by up to 14 to 20 percent over what you’re currently getting. That’s money out of pocket.’”
“‘Your employer, it’s estimated, would see premiums fall by as much as 3,000 percent,’ said the president, ‘which means they could give you a raise.’” (Ricardo Alfonso-Zaldlvar, “FACT CHECK: Premiums would rise under Obama plan,” Associated Press, 3/17/2010)
Credibility Crash: Premiums to Go Up Under the Democrats’ Takeover of Healthcare
Buyers, beware: President Barack Obama says his health care overhaul will lower premiums by double digits, but check the fine print.
Premiums are likely to keep going up even if the health care bill passes, experts say. If cost controls work as advertised, annual increases would level off with time. But don’t look for a rollback. Instead, the main reason premiums would be more affordable is that new government tax credits would help cover the cost for millions of people.
Listening to Obama pitch his plan, you might not realize that’s how it works.
Visiting a Cleveland suburb this week, the president described how individuals and small businesses will be able to buy coverage in a new kind of health insurance marketplace, gaining the same strength in numbers that federal employees have.
“You’ll be able to buy in, or a small business will be able to buy into this pool,” Obama said. “And that will lower rates, it’s estimated, by up to 14 to 20 percent over what you’re currently getting. That’s money out of pocket.”
“Your employer, it’s estimated, would see premiums fall by as much as 3,000 percent,” said the president, “which means they could give you a raise.”
A White House press spokesman later said the president misspoke; he had meant to say annual premiums would drop by $3,000.
“There’s no question premiums are still going to keep going up,” said Larry Levitt of the Kaiser Family Foundation, a research clearinghouse on the health care system. “There are pieces of reform that will hopefully keep them from going up as fast. But it would be miraculous if premiums actually went down relative to where they are today.”
The statistics Obama based his claims on come from two sources. In both cases, the caveats got left out.
The budget office concluded that premiums for people buying their own coverage would go up by an average of 10 percent to 13 percent, compared with the levels they’d reach without the legislation. That’s mainly because policies in the individual insurance market would provide more comprehensive benefits than they do today.
The president usually alludes to that distinction in his health care stump speech, saying the savings would accrue to those people who continue to buy “comparable” coverage to what they have today.
But many of his listeners may not pick up on it.
“People are likely to not buy the same low-value policies they are buying now,” said health economist Len Nichols of George Mason University. “If they did buy the same value plans … the premium would be lower than it is now. This makes the White House statement true. But is it possibly misleading for some people? Sure.”
(Ricardo Alfonso-Zaldlvar, “FACT CHECK: Premiums would rise under Obama plan,” Associated Press, 3/17/2010)
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