Obama: “If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less.”
The Affordable Care Act (ACA), known as Obamacare, produced major dislocations in the individual (non-group) health insurance market by imposing a raft of new mandates and regulations, coupled with new income-related coverage subsidies. The results have not only reduced insurer choice and competition but also created much higher health insurance premiums for millions of Americans.
The Rise of the Average US Family Health Insurance Premiums:
That’s a 249% increase since 2000 (5.8% per year). (Note: US CPI inflation has increased 2.5%/year).
As Table below shows, the national average monthly premium paid in the individual market in 2013 was $244, while by 2019 it was $558—more than doubling (a 129 percent increase) from 2013 to 2019. In contrast, over the same period, the average monthly premium paid in the large-group employer market increased by only 29 percent—from $363 in 2013 to $468 in 2019.
Not the end of the World — Costs can fall if policymakers provide regulatory relief to allow states to redirect subsidies according to the unique needs of the citizens in their states. The initial data from states that implemented Section 1332 waiver programs show that permitting states to apply alternative approaches enabled them to reduce premiums, expand coverage options, and do a better job of focusing available resources on helping sick patients with high healthcare costs.
Because waiver programs are time-limited and temporary, the next step should be for Congress to build on the success by expanding the state flexibility granted during the past Administration and making this flexibility permanent.
Data used in the article from Edmund F. Haislmaier and Abigail Slagle, “Obamacare’s Health Insurance Exchanges in 2021: Increased Options, But Still Less Than Pre-ACA,” Heritage Foundation Issue Brief No. 6066, March 16, 2021, https://www.heritage.org/health-care-reform/report/obamacares-health-insurance-exchanges-2021-increased-options-still-less).