ObamaCare Architect: Premiums to Soar

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Once again for the Obama administration, lofty promises are giving way to hard reality. On September 22, 2010, in an informal discussion regarding the healthcare bill, the president contended that “as a consequence of the Affordable Care Act, premiums are going to be lower than they would be otherwise; health care costs overall are going to be lower than they would be otherwise. And that means, by the way, that the deficit is going to be lower than it would be otherwise.” That was then. Over the weekend it was revealed that MIT economist Jonathan Gruber, the chief architect of ObamaCare, backtracked on the analysis he performed two years ago. He told officials in Wisconsin, Minnesota and Colorado the price of insurance premiums will “dramatically increase” under the reforms.

Gruber didn’t merely rebut the president’s contention. He rebutted his own, made in 2009, after he reviewed a report by the insurance industry that contended premiums would rise sharply with the passage of the healthcare bill. At that time Mr. Gruber argued that the industry report failed to take into account government subsidies provided to help moderate-income Americans purchase insurance, or administrative overhead costs he predicted would “fall enormously” once insurance polices were sold through the anticipated government-regulated marketplaces, or exchanges. “If you literally take the data from the Congressional Budget Office (CBO) you can see that individuals will be saving money in a nongroup market,” he said.

The CBO was less sanguine, saying it couldn’t forecast what would happen to premiums because “so many uncertain variables come into play.”

Some of the so-called variables surrounding Obamacare have already come into play. First and foremost were the waivers to the plan, issued by an administration with a track record of doing favors for certain constituencies. The actual number of waivers granted remains in question. The Hill claims that as of January, 1,231 companies had received waivers from the plan. ABC News had the number at 1,471 in July of 2011.

Regardless, Republicans contended that the waivers were either politically inspired or represented a fundamental flaw with the legislation. “I think it is an understatement to say that these waivers have been controversial,” said Rep. Cliff Stearns, a Florida Republican, during an interview in March  of 2011. “If they needed a waiver in 2011, won’t they need a waiver in 2012, 2013?” Steven Larsen, head of a section of the Health and Human Services department that oversees President Barack Obama’s health care law disagreed. “The annual limit waiver process has been carried out in a way that reflects a commitment to transparency and responsible implementation,” he said. “The overriding purpose of this waiver program is to ensure that Americans do not lose their health coverage before better health insurance options become available in 2014.”

Who’s right? On Friday June 17, 2011, the Obama administration announced it was ending the program as of September 22, 2011 in order to avoid what the Huffington Post characterized as a “potential political distraction ahead of next year’s elections.” Political albatross might have been a bit more accurate.

The next variable that came into play was the CLASS (Community Living Assistance Services and Supports) Act. The original premise of the CLASS Act, a government-sponsored long-term care plan similar to those available in the private sector, was that it would be self-supporting. Those who signed up for the voluntary program would have paid a monthly premium of about $100 for insurance coverage promising cash benefits averaging no less than $50 a day. Furthermore, the CBO, which scored the healthcare bill as reducing the deficit by $210 billion in the years 2012-2021, contended that $86 billion of these savings came from CLASS. Why? Because the program would have taken in premiums for five years, before it paid out claims, making it appear to be “deficit-reducing”–in the near term.

Yet there were doubts about the ability of the program to be self-sustaining from the start, especially if a smaller group of relatively unhealthy Americans were the majority of users. Naysayers also noted that once the program got beyond the ten-year window used to calculate the above CBO numbers, the program would be inundated by cost overruns. As a result, Congress voted that the Health and Human Services (HHS) Secretary had to ensure that the program would be sustainable for 75 years before certifying it.

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  • Bertram Cabot Jr.

    They hope that when the premiums soar that the people will cry out for "single payer" which was always their goal.

    • http://www.okcteaparty.org DMW

      Precisely. Create a Rube Goldberg machine that seems to be nothing but a legislated (and accompanying vast sea of written regulations — "shalls, mays, and determines") bunch of Monkey Wrenches for gears that were already hobbled by gubmint intervention. Then, of course, after inserting their Socialist crap, they yell: "There's turds in the swimming pool!" Their solution? More wrenches, shalls, and mays (maze?).

    • http://www.cobrahealth.com CraigJCasey

      And government underpayment will force medical providers to charge insurance carriers and the insured even more in cost shifting.

  • sedoanman

    For the first time in her life, Pelosi was right: they had to pass it before we could find out what was in it.

  • http://www.cobrahealth.com CraigJCasey

    Why didn't the secretary of HHS simply certify CLASS as self sustaining for the next 150 years? This WH will do anything, say anything to forward its socialist nightmare on us. One of the many reasons I hate Obamacare: http://www.slideshare.net/CraigJCasey/reasons-why

  • BS77

    Please support VOTER ID laws. We must show a valid ID to board aircraft, to make major purchases, to cash checks, to buy medications, to get a passport. I have to show an ID to rent a rug shampoo machine!!! Why not show a valid ID to vote in the US?

    • frustratedRN

      show an ID to rent a rug shampoo machine….ROFLMAO

  • Rifleman

    Back when they were buying (with other people's money, of course), lying, stealing, and cheating to get votes for obamacare I saw a video of some leftists following around and harassing barney frank. They were doing so because obamacare wasn’t single payer, and he was trying to get it through their thick skulls that it would result in the single payer system they wanted.

  • wiseone

    The increase has already started. The dirty little secret that no one is talking about is how the Payroll Tax debate is tied to this. The dems pushed through the payroll tax cut last year (while the repubs were tied up on the Bush tax cuts) because they new premiums were going up 1/1/2011. They wanted it again this year because they did not want people to see it in the election year. If you doubt it then look at year paycheck and compare the Payroll tax reduction with your increased premium. And this is just after the early stuff like kids until 26. Imagine what lies ahead.

  • Manny

    Well Duh! What kind of genius does it take to figure that out?

  • Christine

    I usually pride myself on my reading comprehension abilities, however, I comprehended very little of what was said in this article. At the moment, I am unemployed without insurance. The COBRA that was offered me was well over $1000 per month for a family coverage. Last year before I was laid off, I added my premium payments and copays and found that I was paying double what I would have paid out of pocket in medical expenses as I go. My doctor offers a discount for cash at time of visit, the pharmaceutical company has a discount plan that I could apply for and pay a drastic difference in what they normally charge insurance companies. My question is, why can't we just ask for price reductions and pay as we go? Insurance, for the most part is to make the brokers money, not doing us a favor 'paying' for our medical care.

    • Gena

      A high deductible catastrophic health insurance policy with a health savings account is really the way to go. Think about it this way: We don't expect our auto insurance to coverage oil changes in our cars, or our homeowners insurance to cover new paint for our walls. But we expect our health insurance to cover anything and everything from birth control pills to routine checkups to major medical care. If we paid cash for the routine stuff and just used insurance for major illness/injury, costs and prices would go down to realistic levels, plus the HSA is portable and cumulative and tax-deferred. Why can't politicians show some sense??

  • Jim_C

    And had Obama done nothing on health care, what do you think would have happened to premiums?

    The more you guys attack "Obamacare," the better it will look in relation to your "waaah socialized Marxist tyranny" histrionics. Just another feather in Obama's cap handed to him on a silver platter by the conservatives for whom reality isn't enough–ya just got to push it into krazytown (See "birth certificate," "death panels," and the more recent tempest in a teapot–"curtailing religious freedom" (LOL). Makes you wonder who the REAL "Alinskyites," are, eh? Keep it up!

    We should have taken "Obamacare" when it was first offered–by Nixon.

  • mjs

    “And had Obama done nothing on health care, what do you think would have happened to premiums?”

    Not go up nearly as high, if go up at all. That’s what.

    “ObamaCare is clearly going in the opposite direction, restricting choices, which is one reason why premiums are increasing faster under ObamaCare than if we had done nothing at all.”


  • CSOlson

    Most people overestimate the cost of a good long-term care policy. A healthy, married couple in their mid/late fifties, can share a policy that starts off with over a half million in benefits for about $100 per month per spouse.

    There’s a new type of government-approved long-term care policy that can protect your assets from Medicaid even after the policy runs out of benefits. Here’s an explanation of how these policies work:

  • Norbert

    Obama care is targeting families with autistic children who will likely need long term health care. They want to pretend they don't exist. They want to push them into a black hole where their delicate needs aren't considered. nevermind it will cost states upwards of a million dollars to place severely autistic individuals into state institutions or group homes. Never mind Obamacare doesn't have a clue what it takes to care for the most vulneralbe of autistic community.