• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Side Effects: Obamacare Fueling Higher Insurance Costs

    Despite all the talk about how Obamacare would lower health care costs, it’s already becoming clear that it just won’t be the case.

    The Indianapolis Star reports that companies can expect employee health insurance costs to rise even faster. “Driven by worries about the economy and possibly the effects of health-care reform, [health insurers] are raising rates this year for family coverage through employer-sponsored plans… from 8 percent to 21 percent, which is considerably higher than the 5 percent increase the Kaiser Family Foundation reported in 2009.”

    Employers will undoubtedly pass the price hikes on to their employees or switch to less expensive plans with higher deductibles, lesser coverage or both.  Those outcomes aren’t exactly hallmarks of successful health care reform.

    The Obamacare legislation contained numerous “reforms” (PDF) that can’t help but escalate costs or lower benefits for those who get their health coverage through their jobs. In addition to the new taxes on high-value “Cadillac” health insurance plans, there are increases in the Medicare Part A hospital insurance tax for high earners.  And there are broad fees on the pharmaceutical and insurance industries that will be passed on to consumers at all income levels.

    During his final push to win passage of the health bill, President Obama told a crowd in Strongsville, Ohio, that premiums would “fall by as much as 3,000 percent” under his plan. The evidence rolling in shows that the President not only misspoke, he got the entire direction of premium costs under Obamacare exactly wrong.

    Heritage has long promoted putting health coverage decisions in the hands of patients, not government bureaucrats.  To learn more on how to do that, click here.

    Posted in Obamacare [slideshow_deploy]

    25 Responses to Side Effects: Obamacare Fueling Higher Insurance Costs

    1. Brad, Chicago says:

      Did he really say rates would fall by 3000%? Wouldn't that mean the insurance companies would be paying us? Am I missing something? Falling by 100% brings the total to 0. Does this president tell us anything that hasn't come directly from his imagination?

    2. Jill, Maryland says:

      I believe the goal of the President's health care reform bill is to make employer-sponsored insurance plans become more expensive for the employee. Then in the future, the employee will drop their employer's plan and jump on the "public plan" and his goal of a single payer system will be fulfilled. It is what he really wants, go look up his speaches from before the election.

    3. susan, las vegas says:

      We received a letter last week raising our family's healthcare insurance $275 per month. We will now be paying $1920 for four people ages 61,51,20,19 from Anthem/Blue Cross. I expected a raise, but this is highway robbery! We are a healthy family with no claims!!!! When are people going to wake up? I guess when they either receive notice that their benefits have been cut, their rates are raised and they have little or no prescription coverage. This is only the beginning…if it wasn't so sad, it would be laughable. So many people had their hands out and like the housing bailout, will be sorely disappointed that the government isn't going to do more for them so they can sit on their butts.

    4. Scott Stevens says:

      I think It's time to drop the "care" out of Obamacare. Your article reinforces that.

      Actually I don't believe the care was ever there. It's a pretense for greater socialism by people who refuse to admit they are.

    5. Adam, Pittsburgh says:

      Yes, he actually stated that "our employer would see premiums fall by as much as 3000%." However, it came out a day or two later that the president "misspoke" and what he "meant" was $3,000 . . .

    6. Tommy,Alabama says:

      The only people that think that every thing that the kenyan says is true are the same ones that think that Guam will tip over and capsize if too many people are there

    7. Rick says:

      Adam –

      Based on what the President "meant," I have already spent my $3.000. I am now looking to deduct it on my 2009 tax return.

      What do you think? Do I have to wait until 2014 to take the deduction? Or will I be so much better off by then then that I won't even need to consider a mere $3000 in additional savings?

    8. michael says:

      sooner or later, obamacare will take 10% tithe of all your earnings like a church.

      Praise be to obama, lord of the government tax and take over of the most free country in the world.

    9. Justin,Salt Lake Cit says:

      All we can do Folks is REMEMBER IN NOVEMBER!!

    10. Concerned, Mequon WI says:

      What else is new! Obama listens to his advisers who are apparently wrong most of the time. I'd bet my bottom dollar the CBO is going to be way off. Obama knows what is going on…it's cheaper for an employer (I'm one) to pay the fine than insure our employees. That will force insurance companies out of business and everyone will be under socialized medicine. That's his plan –

    11. Jill, California says:

      Under Obamacare, the cost of health insurance and healthcare in general will "necessarily skyrocket."

    12. Dennis Social Circle says:

      The dems and obama now have the power and controll over all of us, especially the elder, and I am one. They never intended to "care", just controll. We must vote in the coming elections and elect new people that understand the American people never wanted a socialist style health care, nor a socialist "guvnment" for that matter. The politicians must understand they work for we the people not for themselves.

    13. Jeanne Stotler,Woodb says:

      When I took accounting in college I was taught you had to take in more than you put out to remain solvent. BHO wants the Ins. Cos. to put more out than they take in, he wants them to fail so he can have his "single payer" plan controled by the gov't., then they will decide who get's care and who doesn't. If any of you heard the stories of people without Ins. etc, then be prepareds to hear the stories of the ill being denied treatment, long lines to see a doctor, express surgeries. New born's with defects will be put aside to die, elderly will be denied, terminal sick will be pushed aside and given the minimum of pain relief, denied food and water to hasten death. We NEED THIS BILL REPEALED, vote Nov.2, 2010, support the motion to open ALL of BHO's records under FOI act so we can see what he really is, it is apparent he is not what we want in the WH. God Bless America Remember the song "MY COUNTRY 'TIS OF THEE" it refers to the sweet land of LIBERTY, land of our PILGRIMS PRIDE and where our fathers DIED, From EVERY MOUNTAINSIDE LET FREEDOM RING. Bring it back.

    14. Drew Page, IL says:

      The 3,000% comment wasn't the only one where the President misspoke. The taxes on insurance companies will of course be passed along to consumers, as will the additional ccosts to cover dependent children to age 26, as will the cost to increase benefits for treatment of Mental and Nervous conditions the same as any other illness. The increased costs for all of these benefit enhancements and expanded eligibility are of course passed along to consumers, be they employers or individuals purchasing health plans.

      Despite all Mr. Obama's promises that his health care reform is going to reduce your premiums, not increase the taxes of anyone making less than $250,000 and cut the deficit in half, I suggest you just wait and see. His expansion of eligibility for Medicaid will be passed along to the states (except of course for Nebraska) they will have to increase your taxes to cover this cost, but Mr. Obama will say "I didn't increase your taxes, the state did". The taxes on insurance companies and the additional cost they will have to reimburse for government mandated benefit enhancements will come out of the pockets of people who will actually have to pay premium increases, but Mr. Obama will say "I didn't increase YOUR taxes, just those of the insurance companies", knowing full well that those taxes will be coming out of your pocket. The taxes on "Cadillac" health plans (except of course for those in unions) will also wind up coming out of your pocket, as will the taxes needed to provide for those who can't or won't pay for insurance. And this doesn't include the additional taxes that will be needed to fund the incredible federal health care bureaucracy that will blossom over the next four years.

      The requirement to drop pre-existing conditions limitations from individual hea;lth policies will drive most insurance companies currently selling this coverage out of business. The current requirement that all Americans will have to buy health insurance may very likely be ruled un-Constitutional by the Supreme Court. Even if it isn't, many will not purchase health insurance and will instead pay the fine imposed by law, which is cheaper than health insurance. Then, when one of these people needs health insurance, they will buy it, only to drop it when their medical bills are paid. Insurance will not be able to stay in business if people are allowed to buy insurance only when they are sick and drop it once their bills are paid. How long can a company stay in business if they agree to take a few months of premium ($1,000 – $2,000 a month) in exchange for paying a $200,000 to $500,000 medical bill? This will prompt companies offering individual health insurance to get out of the business.

      Whether the government intended this or not is a matter for speculation, but the end result will be the same, forcing the government to become the insurance company. When this happens in the individual health policy market, most, if not all of the employers still proviiding health insurance to employees will find it far easier to discontinue such plans and push employees into the government exchanges. Ultimaely, the government will become the single provider.

    15. Tim AZ says:

      The opposition to the Mao-Bama regime will now grow exponentially as the cruelties of liberalism steadily increase daily upon the American citizen. Discomfort and a shrinking income tend to get the attention of those who would otherwise insulate themselves from reality to avoid anything that makes them uncomfortable. The days ahead should prove interesting as the Mao-Bama regime continue to tighten the screws. It's as if the members of the Mao-Bama regime's self preservation instincts have been chemically castrated.

    16. jill.hetherington Ma says:

      I think it's time to impeach OBama for not adhering to the Constitution. Everything he does hurts America and I don't want to wait 3 years to see him go.

    17. scs, Ohio says:

      The intelligent conservative is dead… Better opposition please.

      Any one aspect of the ACA could and would raise premiums elsewhere as a result. That's why the bill could not be passed piece-wise. Taken as a whole, the bill is very similar to the Massachusetts health-care system which is helping to keep costs down in that state, and was instituted by Republican heart-throb Mitt Romney. It's also extremely similar to the counter-proposal suggested by Republicans as an alternative to "Hillary-care" back in the early 90's. Moreover, the individual mandate, which Tea-Baggers are most up in arms about as an infringement of liberty was an idea originally proposed by The Heritage Foundation, as linked to at the bottom of the article.

      Conservative leaders know that this is an imperfect, but reasonable health-care update that will actually help millions of Americans. The private industry still is in control, and premiums will drop when all aspects of the plan are factored in. This is dangerous because it gives Democrats a major legislative victory that would hurt Republican re-election chances in the long-term.

      Basically stop buying into the demonetization, stop getting all your facts second hand from blogs who quote biased research institutions, and maybe take a minute to read the primary sources of information, not the secondary sources distorting them for you in ready easy to get angry about packages.

      And no, I'm not a paid liberal troll funded by George Soros to spread a left-wing socialist world view across the web. If I were, maybe then I could afford my premiums!

    18. Norma in Nebraska says:

      My significant other's health insurance has increased 36% in the last seven months. His premiums were increased twice and the net result is that a couple of weeks ago he said "NO MORE!" and dropped his coverage. He says he is going to do what the illegals do when they need medical care – go to the emergency room. Of course as an American citizen he will be expected to pay his bill – hope he doesn't have to file bankruptcy!

      Every single time I hear the words, "I am from the government and I am here to help you," I know for sure that something bad is about to happen to us!

      I am wondering just how far our government can go to take control of every single aspect of our lives before we stand up and say, "ENOUGH! NOT anymore!" I am afraid we are going to see a true second revolution in this country if Washington doesn't put on the brakes. I think it is certainly bad policy to pass a law and then have to campaign across the country to convince people that they are going to "love it" once they know what is in it!!!! The hits just keep on coming . . . .

    19. R.Turnage, Mississip says:

      scs in Ohio said "Taken as a whole, the bill is very similar to the Massachusetts health-care system which is helping to keep costs down in that state".

      Sorry, but that's incorrect. RomneyCare in Massachusetts has accelerated rising costs: (http://tinyurl.com/lx8nqk): "health care costs continue to rise much faster than the national average. Since 2006, total state health care spending has increased by 28 percent. Insurance premiums have increased by 8–10 percent per year, nearly double the national average."

      Not only that, it has not achieved it's "universal coverage" via it's mandates, yet has managed to balloon over-budget (surprise, surprise): http://tinyurl.com/nj94x4
      "…between half and two-thirds of those uninsured before the plan was implemented remain so…The Massachusetts plan might not have achieved universal coverage, but it has cost taxpayers a great deal of money. Originally, the plan was projected to cost $1.8 billion this year. Now it is expected to exceed those estimates by $150 million. Over the next 10 years, projections suggest that Romney- Care will cost about $2 billion more than was budgeted. "

      Mass. plan to try to reign in the costs? Rationing.

      You can't escape the economic fact that price fixing always leads to rationing and subsidizing always leads to increased use. Those two things don't work well together.

      Romney's plan may have been placed on ideas put forth by Heritage, but that doesn't change the fact that it has been a disaster. As to wether it was enacted as Heritage put forth, I don't know. I hope not, and I doubt it, since Romney's plan involves a government panel that gets to decide on the requirements for a policy before it can be listed in the exchange, among other things. I'm currently looking for Heritage's original ideas on the matter.

    20. Frank, Chicago says:

      This legislation is only an interim step towards a National Medical payment system. The votes weren't there to go all the way so they settled for a bill that would mandate so many additional financial burdens for the private health insurance industry that they could effectively either put it them out of business or make them so unpopular that public sentiment would turn against them. Eliminating lifetime benefit caps, ending pre-existent condition coverage exclusions…these are hugely expensive propositions. Healthcare Reform is a misnomer. We should call it the Private Insurer Termination Act (PITA).

    21. Norma in Nebraska says:

      RE: Romney's Plan – Perhaps the current administration should have looked at that particular model of health insurance in order to determine what not to do!!!!

      I have to say that I think the real problem in our country is that more and more Americans want something for nothing: no work, no money, no responsibility, no accountability. And these very expectations result in little or no self pride, no morals, and no future. The current mentality seems to be, "Well, if there is something free out there, I might as well get some of it because if I don't someone else will." This is how earmarks are justified in the beginning, and the more "programs" that are instituted, the more regulation we have because no one cares if they loose freedom as long as they "get something for nothing."

      As a nation we are certainly slow learners. We have all kinds of history that shows what the net result will be in turning to alternative forms of government, but it is almost like we have to re-learn all the hard lessons of our ancestors. Our Departments of Education are helping to erase the history we need to remember and our children need to learn about: in some States they will no longer be teaching history prior to 1897 because it is "not relevant" to the young people in the classes. So these young people will grow up with no recollection of why our country was founded, who the first President was, or why our government was originally a Republic . . . a truly sad day in America.

      "We won't miss our freedom until we don't have it anymore!" Only when the threat is real do we seem to have some level of urgency to protect our Constitution, our rights and our freedoms. The current crisis has been perpetuated by the need to believe that no matter what, our country will remain the same as it has always been since the Founding Fathers designed a way of doing business at all levels.

      I am sad that my grandchildren will grow up in a society where true freedom is only a fairytale of the past. Of course, they won't experience the loss because they won't know any better, but I feel bad that they will have vastly limited opportunities and challenges. And I fear I am witnessing the death of a nation, and even though it started years ago, we are on the fast slide now. God help us all!!!!

    22. Pingback: Side effects: States will feel the effects of Obamacare

    23. Pingback: I Got Some Transparency for You Right Here

    24. Pingback: I Got Some Transparency for You Right Here

    25. Pingback: Top Ten Side Effects of 2010 | The Conservative Papers

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×