HEALTH CARE COSTS
PREMISE: The so-named "Affordable Care Act" was supposed to make health insurance affordable for all Americans.
HOW IT’S WORKING: Premiums and deductibles are rising because of the health reform law.
- In 2014, right after the new law was implemented, an analysis from the Manhattan Institute found that individual-market premiums increased by 49%. (Forbes) The premiums for private plans available in the ACA exchanges are so expensive that most people – nearly 90 percent – need a tax credit or subsidy to be able to afford them. (Dept. of Health and Human Services)
- Despite promises to lower the average family premium by $2,500, the opposite has taken place and family plans have become much more expensive. According to the Kaiser Family Foundation, the average yearly family premium (for employer-sponsored coverage) was $13,770 in 2010, the year the health law passed. In 2016, the average family paid $18,142, meaning yearly family premiums have increased more than $4300, or more than 30 percent, since the law's passage.
- The average individual deductible for the ACA plan with the lowest premium, called a Bronze plan, is $6,092 for 2017. For a family plan, the deductible is over $12,000 (Health Pocket Study). These deductibles are more than 40% higher than what was typically available in the individual market prior to health reform. (Forbes)
- Higher claims costs and more regulations are likely to drive premiums higher and higher. Even (then) Department of Health and Human Services Secretary Kathleen Sebelius acknowledged in a press conference that many people would see premium increases as a direct result of the law. (Wall Street Journal)
- According to the 2016 Health Plan Survey from United Benefit Advisors, (the nation's largest independent survey of employer-sponsored benefits), the median in-network deductible on an employer-sponsored PPO health plan increased 50% or from $1,000 to $1,500 between 2015 and 2016. (PlanSponsor)
- Deductibles for individual workers increased 67% from 2010-2015 without adjusting for inflation. Between 2004 and 2014, patient cost-sharing rose by 77%, driven by a 256% jump in deductible payments. (Wall Street Journal)
- Since the ACA was passed, deductibles have risen seven times as fast as wages. Unfortunately, for many families, this means they may have health insurance, but cannot afford to use it. (Kaiser Family Foundation)
- According to the Department of Health and Human Services, premiums for ACA plans are projected to increase 25% in 2017, on average. (Wall Street Journal)
- Overall employers’ costs of providing health benefits are expected to go up by about 6% next year while employees should expect about a 5% increase in their monthly premiums, according to a survey by the National Business Group on Health (NBGH).
PREMISE: The health law promised to implement its reforms without adding a dime to the national debt or increasing the tax burden of people in the middle class.
HOW IT’S WORKING: Updated cost projections show it will add significantly to our deficits, require substantial tax increases, and substantially increase costs for Americans ineligible for government subsidies.
- Of Americans’ household spending in 2015, 8% went toward health care (U.S. Department of Labor), up from 5.8% in 2007 (Wall Street Journal).
- As spending on housing, food and transportation decreased in middle-income households after the recession, by 2014, health-care spending was 25% higher than in 2007. As a result, many households have had to cut back on clothing and dining out. (Wall Street Journal)
- There are more than 20 tax increases in ObamaCare, totaling $1 Trillion in revenues during 2010-2020. According to the Congresional Budget Office, these taxes and penalties will cost American families more than $560 Billion in new payments over a decade, and despite the new revenue, the law will add $6.2 trillion to our long-term deficits, according to a GAO report.
- The main mechanism in the law for making health insurance more affordable is offering subsidies and tax credits through state exchanges to people who are at 400 percent of the federal poverty level or below. These subsidies and the related spending on the exchanges will cost about $1.01 trillion during the ten years. (CBO July 2012 score) This means that for anyone not receiving a subsidy, he or she will pay for health care twice: once to cover his or her own rising premiums, and again in taxes to fund the subsidies for others. Such cost shifting may temporarily ease the cost for those receiving the subsidies, but it does nothing to address the root problems of rising costs.
- An analysis of the most recent CBO score shows that the federal government will spend a total of $2.6 trillion to implement the law from 2012 to 2022. (Senate Budget Committee)
- Along with tax increases and additions to the deficit, the law will cut $716 billion from the Medicare program for seniors in order to pay for the new spending. (CBO July 2012 score)