The REAL Story Behind Obamacare’s Failed Premium Promise
This morning the Kaiser Family Foundation released a report claiming individuals will receive $1.3 billion in rebates under Obamacare’s new medical-loss ratio regulations later this summer. A Bloomberg article this morning, quoting analysts from Goldman Sachs, cites the number at $1.2 billion. The Kaiser study – which stated rebates would average $72-127 for the small percentage of individuals who actually receive them – admitted that the overall rebate levels are “not particularly large in many instances.”
While these rebates represent a prime political opportunity for the President to claim Obamacare is “working” during his re-election campaign this summer, the rebates ignore the bigger story about Obamacare – which is the law’s significant failure to LOWER premiums for all Americans by $2,500, as candidate Obama repeatedly promised. For instance, in a speech on February 27, 2008, he said that “We’re going to work with you to lower your premiums by $2500 per family per year. And we will not wait 20 years from now to do it or 10 years from now to do it. We will do it by the end of my first term as President.” Likewise, in July 2008, Jason Furman – who remains a senior economic advisor within the Administration – told the New York Times that “we think we could get to $2,500 in savings by the end of the first term, or be very close to it.”
Yet as the below chart demonstrates, while candidate Obama promised that premiums would go DOWN by $2,500, they actually have gone UP by nearly as much – from $12,680 in 2008 to $15,073 in 2011, according to Kaiser data. Multiply that nearly $5,000 difference (i.e., between the $2,500 premium reduction promised and the $2,400 premium increase received) by more than 100 million American households and you have a broken promise amounting to TRILLIONS of dollars to middle-class families around the country.
When compared Obamacare’s many trillions of dollars in promised premium reductions that did not arrive, a little over one billion dollars in medical-loss ratio rebates is a relative pittance to families struggling to pay their rising premiums. Or, put another way, a $127 rebate won’t even begin to make up for the $2,400 in premium increases families in employer plans have faced just since Barack Obama was elected. That’s the real story of Obamacare’s failure to deliver.
