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Hugging Higher Costs

- October 25, 2016

Both Obama And Clinton Have Recently Praised ObamaCare For Being Affordable Despite Rising Premiums And Out Of Pocket Costs

TOP TAKEAWAYS

  • Yesterday, the Obama Administration announced 2017 premium increases averaging 25 percent for the benchmark plan offered on the federal ObamaCare exchange.
  • In the face of these rate hikes, President Obama and Hillary Clinton have both continued to praise the law for creating affordable health care.
  • Yet deductibles have skyrocketed under ObamaCare, making it unusable for many.
  • And due to increasing costs under the law, insurers are pulling out of the ObamaCare marketplace at alarming rates, leaving millions with fewer choices.

(Hillary Clinton, Twitter Feed, 3/23/15)

Yesterday, The Obama Administration Announced 2017 Premium Hikes Averaging 25 Percent For The Federal Exchanges Benchmark Silver Plan. "For 2016, the benchmark plan's premium rose only 7.2%, on average, for the states that use healthcare.gov. (Looking only at states on the federal exchange, premiums are rising 25% for 2017.)" (Tami Luhby, "Obamacare Premiums To Soar 22%," CNN, 10/24/16)

  • The 25 Percent Federal Average Is Comprised Of 39 States. "The average premium, or monthly enrollment payment, for a closely watched type of Obamacare plans are set to rise by an average of 25 percent in the 39 states served by HealthCare.gov, officials revealed Monday." (Dan Mangan, Obamacare Enrollment: A Sneak Peak At 2017 Plans And What They'll Really Cost You," CNBC, 10/24/16)

"Significant Spikes In Premiums, Insurer Dropouts And Persistently Low Enrollment Numbers Are Combining To Make This Fall's Sign-Up Period A Crossroads For The Obama Administration's Signature Health Law." (Louise Radnofsky And Stephanie Armour, "U.S. Health Law Faces Critical Year," The Wall Street Journal, 9/7/16)

  • A Death Spiral Becomes More Likely As More Premiums Rise And Insurers Lose Money. "'Are we in an Obamacare 'death spiral?' health insurance consultant Robert Laszewski asked in a Sept. 9 bulletin to clients, where he described the grim scenario. In a death spiral, as options for coverage shrink, insurers attract increasingly sick patients and suffer losses. That forces them to raise rates, driving away healthy, profitable customers. Facing more losses, they raise rates again, causing more healthy people to leave, and so on -- until all that's left are high premiums and a small pool of the unwell." (Tatiana Darie, "Shaky Obamacare Market Adds To 'Death Spiral' Fears," Bloomberg, 9/23/16)

Despite Costs Spiraling Out Of Control, Obama And Clinton Continue To Praise The Affordability Of The Law

In A Recent Speech In Miami, Obama Claimed ObamaCare "Has Done What It Was Designed To Do: It Gave Us Affordable HealthCare." OBAMA: "The Affordable Care Act has done what it was designed to do: It gave us affordable health care." (President Obama, Remarks On The Affordable Care Act, Miami Dade College , Miami, Florida, 10/12/16)

Click To Watch

At The Second Presidential Debate, Clinton Defended ObamaCare As Making Health Care More Affordable For The Uninsured. CNN'S ANDERSON COOPER: "Secretary Clinton, let me follow-up with you, your husband called Obamacare "the craziest thing in the world", saying small business owners are getting killed, premiums doubled, coverage is cut in half. Was he mistaken or was his mistake simply telling the truth?" CLINTON: "No. I mean, he clarified what he meant and it's very clear. Look, we are in a situation in our country where if we were to start all over again, we might come up with a different system. But we have an employer-based system: that's where the vast majority of people get their health care. And the Affordable Care Act is meant to try to fill the gap between people who are too poor and couldn't put together any resources to afford healthcare, namely people on medicaid." (Hillary Clinton, Remarks At The Second General Election Presidential Debate, Washington University, St. Louis, Missouri, 10/9/16)

Click To Watch

IN ADDITION TO FEDERAL OBAMACARE RATE INCREASES, APPROVED STATE RATE INCREASES HAVE REACHED UPWARDS OF 50 PERCENT

High Premium Spikes Show The Enormity Of The Challenges Facing ObamaCare. "Finalized rates for big health insurance plans around the country show the magnitude of the challenge facing the Obama administration as it seeks to stabilize the insurance market under the Affordable Care Act in its remaining weeks in office." (Louise Radnofsky, "Rate Increases For Health Plans Pose Serious Test For Obama's Signature Law," The Wall Street Journal , 10/18/16)

  • A Senior Representative For Blue Cross Blue Shield Characterized The Situation As Serious. "But in all, the premiums offer the clearest portrait yet of health plans' assessment of the stability of the individual insurance market on the eve of the fourth, critical, sign-up window for the law. 'The situation is serious,' said Alissa Fox, senior vice president of the Office of Policy and Representation for the Blue Cross Blue Shield Association. 'The reason the premiums are where they are is that the people we are covering have serious conditions and they're using a lot of medical services because of their chronic illnesses. That's clear. And there's not enough young, healthy people to balance out those costs.'" (Louise Radnofsky, "Rate Increases For Health Plans Pose Serious Test For Obama's Signature Law," The Wall Street Journal , 10/18/16)

Premium Increases Could Substantially Impact As Many As 10 Million People Who Do Not Qualify For Government Subsidies. "The individual market, overhauled under the health law to require insurers to sell to everyone regardless of their health history, is made up of approximately 10 million people who get coverage from HealthCare.gov or a state equivalent, and another group who buy coverage on their own outside the system. People in the first group typically have federally funded subsidies pegged to the cost of coverage that can blunt the impact of premium increases, and stave off a rapid deterioration in enrollment. People who buy coverage on their own outside the site don't, and some estimates put their numbers as roughly similar to those who use HealthCare.gov. This latter group's participation in the market is as critical as people who get subsidies-if not more, because actuaries typically assume that wealthier people enjoy better health." (Louise Radnofsky And Stephanie Armour, "U.S. Health Law Faces Critical Year," The Wall Street Journal, 9/7/16)

Arizona, Minnesota, Oklahoma, And Tennessee ObamaCare Premiums Will Increase By At Least 50 Percent In 2017

According To ACA Signups Charles Gaba, Arizona Regulators Have Approved Unsubsidized Premium Increases Averaging 57 Percent For 2017. (Charles Gaba, "Arizona: Approved *Unsubsidized* 2017 Indy Mkt Rate Hikes: 57%," ACA Signups, 10/17/16)

The Two Remaining Insurers Are Raising Rates 51 Percent And 74.5 Percent. "After months of health-insurer exits from the Affordable Care Act marketplace in Arizona, state regulators have approved plans from two companies that will be the only marketplace insurance providers next year. Blue Cross Blue Shield of Arizona will sell marketplace plans in every county except Maricopa County in 2017. The Phoenix-based insurer's average rates will increase 51 percent, Arizona Department of Insurance filings show. Maricopa County residents' only option will be Centene Corp., which said it will sell its 'Ambetter' plans. State regulators approved a 74.5 percent increase for Centene/Ambetter plans." (Ken Alltucker, "'Obamacare' In Arizona: 2 Remaining Insurers Hike Rates By 50-75 Percent," Arizona Republic , 10/19/16)

Minnesota's ObamaCare Exchange In On The Brink Of Collapse, Prompting Insurers To Drastically Increase Premiums In An Effort To Stay In Business. "Minnesota will let the health insurers in its Obamacare market raise rates by at least 50 percent next year, after the individual market there came to the brink of collapse, the state's commerce commissioner said Friday." (Katherine Doherty And Zachary Tracer, "Near 'Collapse,' Minnesota to Raise Obamacare Rates by Half," Bloomberg, 9/30/16)

  • "The Increases Range From 50 Percent To 67 Percent, Commissioner Mike Rothman's Office Said In A Statement." (Katherine Doherty And Zachary Tracer, "Near 'Collapse,' Minnesota to Raise Obamacare Rates by Half," Bloomberg, 9/30/16)
  • Approved Premium Increases Are Expected To Average Around 60 Percent For 2017. "On average, rates in the state will rise by about 60 percent, said Shane Delaney, a spokesman for MNSure, the state's marketplace for Obamacare plans. About 250,000 people, or 5 percent of the state's population, were covered under plans bought on the individual market, including plans bought on the Affordable Care Act markets as well as outside it." (Katherine Doherty And Zachary Tracer, "Near 'Collapse,' Minnesota to Raise Obamacare Rates by Half," Bloomberg, 9/30/16)
  • "The Rate Hike Follows Increases For This Year Of 14 Percent To 49 Percent." (Katherine Doherty And Zachary Tracer, "Near 'Collapse,' Minnesota to Raise Obamacare Rates by Half," Bloomberg, 9/30/16)

Oklahoma Is Expecting Approved Premium Increases Averaging 76 Percent For 2017. "Some of the lowest income people are struggling in states where many others who are eligible for minimal or no subsidies are also hard hit. A Department of Health and Human Services report in August found expanding Medicaid coverage to the poorest of the poor lowers marketplace premiums by 7%. Oklahoma and Tennessee - which have had a 76% and 56% increase respectively - did not expand Medicaid." (Jacquie Lee And Jayne O'Donnell, "Regulators Approve Higher Health Premiums To Strengthen Obamacare Insurers," USA Today , 10/18/16)

FOR MANY CONSUMERS, INCREASING PREMIUMS HAVE COINCIDED WITH OUT OF CONTROL DEDUCTIBLES MAKING MANY FEEL AS IF THEY ARE UNINSURED

High Deductibles Are Making Many Feel As If They Are Uninsured. "This is crazy, she wanted to scream. She has insurance, but it comes with a $6,000 family deductible - $2,000 for each of them - that she must pay before her policy typically pays a dime. Last year, she was uninsured. This year feels exactly the same. Walla is one of the millions caught in the reshuffling of the who-pays-what calculation within the U.S. insurance industry, especially in employer-sponsored group plans used by the vast majority of Americans." (Jenny Deam, "A Shift In Coverage Has Even The Insured Skipping Medical Care," Houston Chronical, 10/1/16)

Since The Inception Of ObamaCare, Deductibles Have Steadily Increased With Some 2016 Cost Spikes Averaging More Than $1,000

"In The Past Five Years Alone, Deductibles Have Risen 10 Times Faster Than Inflation And Nearly Six Times Faster Than Paychecks." (Jenny Deam, "A Shift In Coverage Has Even The Insured Skipping Medical Care, Houston Chronicle, 10/1/16)

In A Span Of Ten Years, Americans Enrolled In High Deductible Plans Went From 1 Million To 19 Million. "In 2005, about 1 million people in this country had high-deductible plans coupled with a pretax health-savings account. By early 2015, that number had shot up to 19 million, according to figures from American's Health Insurance Plans, the insurance industry national trade association." (Jenny Deam, "A Shift In Coverage Has Even The Insured Skipping Medical Care, Houston Chronicle, 10/1/16)

The Average Deductible Of The Most Common ObamaCare Plan Is $3,000 While The Average Out Of Pocket Expense For A Hospital Stay Can Exceed $4,000. "The problem here is that many of the Obamacare plans have high deductibles and co-pays, which makes them unaffordable for many consumers without subsidies. The average deductible for the most common Obamacare plan is over $3,000. Average out-of-pocket expenses for a hospital stay can top $4,000. Realistically, the plans that are working look more like that hated three-letter acronym, HMO." (Editorial Board, "Obamacare Is A Failing Insurance Product," Florida Times-Union, 9/20/16)

  • Today, The Average Deductible For Individual Plans Is $1,478 . "Not only has the number of plans with deductibles grown, so, too, has the amount patients must come up with before coverage kicks in. Today, the average deductible in individual plans that have one is $1,478." (Jenny Deam, "A Shift In Coverage Has Even The Insured Skipping Medical Care, Houston Chronicle, 10/1/16)

ObamaCare's Benchmark Plan Leaves Consumers Paying Deductibles That Average 30 Percent Of Their Health Costs. "The benchmark plans are the second-lowest-cost "silver" plans in a consumer's region. Silver plans, the most popular type of Obamacare coverage, on average cover 70 percent of their customers' health costs, with enrollees being responsible for paying the remaining share out of pocket, in the form of deductibles, co-payments and co-insurance." (Dan Mangan, "Obamacare Enrollment: A Sneak Peak At 2017 Plans And What They'll Really Cost You," CNBC, 10/24/16)

EVEN AS COSTS INCREASE UNDER OBAMACARE, INSURERES DROPPING COVERAGE OPTIONS

Yesterday, The Obama Administration Also Announced A 28 Percent Decrease In The Number Of Insurers Partaking In ObamaCare. "The number of insurers serving the federal market will drop from 232 to 167, a loss of about 28 percent." ("Obama Administration Confirms Healthcare.gov Premium Hike," Associated Press, 10/25/16)

"A Number Of Health Insurers Have Cut Back Their Presence In Obamacare Markets For 2017, Including UnitedHealthcare, Aetna, And Cigna." (Dan Mangan, Obamacare Enrollment: A Sneak Peak At 2017 Plans And What They'll Really Cost You," CNBC, 10/24/16)

With Losses Piling Up, Large Insurers Are Leaving ObamaCare Exchanges In Droves. "With the fourth open-enrollment period set to begin this fall for the marketplaces set up by the Affordable Care Act, it's becoming clear that the market for health insurance has not evolved as expected, or hoped. The market is smaller than projected. The people who have bought health plans overall are sicker than predicted. And health insurers have incurred larger losses than anticipated. As a result, some large national insurance companies, including UnitedHealthcare, Humana and Aetna, plan to abandon markets across the country next year." (Guy Boulton, "Health Insurers Eye Steep Increases," Milwaukee Journal Sentinel , 8/24/16)

UnitedHealth Group Experienced Increased Profits From Leaving ObamaCare. "UnitedHealth Group reported strong profits and boosted its earnings forecast Tuesday helped by its controversial pullout from the Obamacare health insurance program. Shares of the largest US health insurer and health benefits manager led the Dow Jones Industrial Average higher, jumping nearly 6 percent on its third quarter earnings and a strong outlook 2017. UnitedHealth scored gains across the business, with increases in both employer-based health programs and those run through the US government Medicaid and Medicare programs." ("UnitedHealth Profits Grow With Retreat From Obamacare," ("UnitedHealth Profits Grow With Retreat From Obamacare," Yahoo, 10/18/16) 10/18/16)

  • Cantor Fitzgerald Said That UnitedHealth's Profits Justify Their Decision To Leave ObamaCare. "UnitedHealth made waves in April, when it announced it would drop out of most the state exchanges for individual insurance policies created under the Affordable Care Act, President Barack Obama's signature healthcare reforms, because the policies were unprofitable. At the time, executives from the insurer said it could lose up to $650 million in the exchanges. Some health care policy experts at the time said UnitedHealth's pullback reflected failures in how it structured its program rather than in Obamacare as a whole. But a note Tuesday from Cantor Fitzgerald said the strong third-quarter results showed the advantage to its 'early determination to quit exchanges,' adding that the company 'also appears to be gaining share in the commercial and Medicare markets.'" ("UnitedHealth Profits Grow With Retreat From Obamacare," ("UnitedHealth Profits Grow With Retreat From Obamacare," Yahoo, 10/18/16)10/18/16)
  • Credit Suisse Called UnitedHealth's Experience With ObamaCare "Harrowing." "'With UNH largely exiting the exchanges in 2017, we think the company has now put its harrowing experience in the exchange market largely behind it,' said Credit Suisse. 'The stock can now focus more exclusively on the sustainable businesses that generate positive returns.'" ("UnitedHealth Profits Grow With Retreat From Obamacare," Yahoo, 10/18/16)

The Lack Of Competition Will Likely Affect Millions

Due To The Mass Exodus Of Insurers From ObamaCare, 1.4 Million People Will Lose Their Insurance Coverage. "At least 1.4 million people in 32 states will lose the Obamacare plan they have now, according to state officials contacted by Bloomberg. That's largely caused by Aetna Inc., UnitedHealth Group Inc. and some state or regional insurers quitting the law's markets for individual coverage. (Zachary Tracer, Tatiana Darie And Katherine Doherty, "More Than 1 Million People To Lose Obamacare Plans As Insurers Quit," Bloomberg, 10/14/16)

21 Percent Of Consumer Will Be Left With Only One Insurer To Choose From. "The price hikes aren't Obamacare's only problem for next year. Insurers are also fleeing the exchanges. The number of carriers will drop to 228 next year in the federal exchange and selected states, down from 298 in 2016. Some 21% of consumers returning to the exchanges will only have one carrier to chose from, though that insurer will likely offer multiple plan choices." (Tami Luhby, "Obamacare Premiums To Soar 22%," CNN, 10/24/16)

The Dearth Of Competition Could Cause Consumers To Lose Their Doctors And Costs To Skyrocket. "Sign-ups for Obamacare coverage begin next month. Fallout from the quitting insurers has emerged as the latest threat to the law, which is also a major focal point in the U.S. presidential election. While it's not clear what all the consequences of the departing insurers will be, interviews with regulators and insurance customers suggest that plans will be fewer and more expensive, and may not include the same doctors and hospitals. It may also mean that instead of growing in 2017, Obamacare could shrink. As of March 31, the law covered 11.1 million people; an Oct. 13 S&P Global Ratings report predicted that enrollment next year will range from an 8 percent decline to a 4 percent gain." (Zachary Tracer, Tatiana Darie And Katherine Doherty, "More Than 1 Million People To Lose Obamacare Plans As Insurers Quit," Bloomberg, 10/14/16)

HILLARY CLINTON HAS FULLY EMBRACED OBAMACARE

Bloomberg Politics Headline: "Make No Mistake, Hillary Clinton Loves ObamaCare" (David Knowles, "Make No Mistake, Hillary Clinton Loves ObamaCare," Bloomberg Politics, 3/23/15)

Clinton Called ObamaCare One Of The "Greatest Accomplishments" Of The United States. CLINTON: "But the fact is, we have the Affordable Care Act. That is one of the greatest accomplishments of President Obama, of the Democratic Party, and of our country." (Hillary Clinton, Remarks At NBC's Democratic Presidential Primary Debate , Charleston, S.C., 1/17/16)

  • Clinton: "We Have Accomplished So Much" Through ObamaCare. CLINTON: "And again, we need to get into the details. But here's what I believe, the Democratic Party and the United States worked since Harry Truman to get the Affordable Care Act passed. We finally have a path to universal health care. We have accomplished so much already. I do not to want see the Republicans repeal it, and I don't to want see us start over again with a contentious debate. I want us to defend and build on the Affordable Care Act and improve it." (Hillary Clinton, Remarks At NBC's Democratic Presidential Primary Debate , Charleston, S.C., 1/17/16)

Click To Watch

Clinton Doesn't Just Support ObamaCare, She Wants To Expand It

Hillary Says She Will "Build On" Obamacare. "Hillary will: Defend the Affordable Care Act and build on it to slow the growth of out-of-pocket costs." ( Hillary For America, Accessed 4/21/16)

Hillary Has Plans To Expand Obamacare. "Instead, Clinton has gone all in with Obamacare, embracing the controversial health law and promising to defend and expand it. 'I am a staunch supporter of President Obama's principal accomplishment, namely the Affordable Care Act,' she said in a debate in Milwaukee on Feb. 11. Her plan to expand Obamacare consists of a slew of wonky measures that together are intended to cut costs and improve coverage for patients." (Alison Kodjak, "Hillary Clinton Hitches Her Health Care Wagon To Obamacare," NPR, 2/23/16)


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