Will the 37th time be the charm?
On Thursday, the U.S. House of Representatives voted for the 37th time to undo the new healthcare law – a bill sponsored by Sixth Congressional District Rep. Michele Bachmann. But the vote was largely symbolic; the Senate has no plans to pass the bill, and President Barack Obama wouldn’t sign it if they did.
Bachmann has long opposed the new law, and wrote about its flaws in an Investor’s Business Daily op-ed this week.
One problem is premium increases: “On average, premiums will grow 100 percent when the law is fully implemented, and some will soar more than 400 percent,” she wrote.
It’s true that premiums will go up under the new law. But the figures Bachmann is citing come from a partisan source that only tells part of the story.
Bachmann is referring to a report compiled by the House Energy and Commerce Committee Republican Majority. House GOP lawmakers generally oppose the new health care law.
The committee asked 17 large health insurers how the new law would affect their premiums. The numbers cited in Bachmann’s op-ed refer to people who buy coverage on the individual market, which is expected to be a relatively small pool of people. Right now, that’s less than 10 percent of the country, according to Census data.
The report says that one of the 17 companies explained that, for this particular pool of people, the average premium increase could be 93 percent and that some could see increases as high as 413 percent. (The report does go on to say that people getting insurance through their employers could also see an increase, but it’s smaller.)
But the report doesn’t name the company, and it doesn’t give information from the other companies it surveyed.
Furthermore, the report leaves out the fact that some people buying coverage through the individual market will receive government subsidies to help offset the cost of their monthly premium. A study commissioned by America’s Health Insurance Plans (AHIP), the leading trade group for health insurers, found that some low-income patients could pay nothing for coverage if they qualify for the subsidy, while others may pay as much as 40 percent of the cost depending on their income and the plan they choose.
That’s not to say that premiums for people in the individual market won’t go up. Some reasons include:
- The law requires insurance companies provide better coverage even in the most basic plans offered through the exchange.
- The law requires companies offer coverage to those with pre-existing conditions who also tend to have higher health care costs.
- The law eliminates premium differences for gender and age. That means older people and women could see lower premiums if they buy through the exchange, while younger people and men could see higher ones.
- New taxes and fees included in the health care law that insurers are expected to pass on to consumers.
- Health insurance premiums have and will continue to go up because of the rising cost of medical care in general.
A separate AHIP study points out how important it will be for young, healthy people to participate.
“If a large increase in premiums encourages young, healthy individuals to forgo or drop coverage and instead pay a penalty, insurance markets will become unstable and unaffordable,” the study states.
Other studies have produced different numbers. A recent report conducted by the Society of Actuaries found that premiums for coverage purchased through the individual market will increase 32 percent by 2017. (Again, subsides aren’t taken into account in that figure.)
In Minnesota, the average premium increase will be about 29 percent for those buying coverage through the individual market.
It’s true that premiums will go up for some people under the new health care law, but how much will depend on age, location and gender, among other factors.
But Bachmann’s claim is misleading for a few reasons.
She’s relying on a partisan study that doesn’t name its sources and relies on feedback from one unnamed company to make the case that premiums could go up as much as 400 percent under the new law.
Other non-partisan studies have found that premiums will go up, but by far less than the House Energy and Commerce Committee finds.
And the number that Bachmann cites is on the high-end and applies only to the individual market, where a relatively small number of people will get their insurance come 2014; most people will continue to get their through their employers or through government programs. The figure doesn’t take into account the fact that some people buying insurance through the individual market will get subsides to offset the costs of coverage.
Investor’s Business Daily, Bachmann says health reform requires Obamacare repeal, by Rep. Michele Bachmann, May 15, 2013
House Energy and Commerce Committee, Letters To Health Insurance Companies Regarding PPACA’s Effect on Health Insurance Premiums, March 14, 2013
House Energy and Commerce Committee, Obamacare Oversight: The Looming Premium Rate Shock
Kaiser Family Foundation, Why premiums will change for people who now have nongroup insurance
Kaiser Family Foundation, subsidy calculator
America’s Health Insurance Plans, Comprehensive Assessment of ACA Factors That Will Affect Individual Market Premiums in 2014
Congressional Budget Office, An Analysis of Health Insurance Premiums Under the
Patient Protection and Affordable Care Act, 2009
Kaiser Health News, FAQ On The Latest Study: Obamacare’s Impact On Insurance Claim Costs, March 28, 2013
Society of Actuaries, Cost of the Newly Insured Under the Affordable Care Act
Research Findings: Independent Studies Estimate the Cost and Coverage Impact of the Affordable Care Act in Selected States
Jonathan Oberlander, professor of Social Medicine, Health Policy and Management and Political Science at UNC-Chapel Hill
Robert Zirkelbach, AHIP Spokesman