AP: Insurance costs go up under Obamacare 

The AP notes that the the White House has been a bit misleading in how they've presented their health care plan:

Premiums are likely to keep going up even if the health care bill passes, experts say. If cost controls work as advertised, annual increases would level off with time. But don't look for a rollback. Instead, the main reason premiums would be more affordable is that new government tax credits would help cover the cost for millions of people. 

Listening to Obama pitch his plan, you might not realize that's how it works.

As noted elsewhere today in the Wall Street Journal, this is exactly the same reason why health insurance premiums are sky rocketing in Massachusetts where the state health plan has many of the same features as Obamacare:

While Massachusetts' uninsured rate has dropped to around 3%, 68% of the newly insured since 2006 receive coverage that is heavily or completely subsidized by taxpayers.

And Massachusetts has an individual mandate -- forcing people to buy insurance doesn't necessarily cover the costs by bringing more people into the system. This is doing nothing to attack the underlying problem of cost control. Massachussetts per capita health spending has risen to 27 percent above the national average since their state health care plan was passed and this is the very plan that the White House's own David Axelrod favorably compared to Obamacare this past weekend.

Also, the AP looks at the substance of one of Obama's claims about reducing costs:

"Your employer, it's estimated, would see premiums fall by as much as 3,000 percent," said the president, "which means they could give you a raise."

A White House press spokesman later said the president misspoke; he had meant to say annual premiums would drop by $3,000.


The statistics Obama based his claims on come from two sources. In both cases, the caveats got left out.

A report for the Business Roundtable, an association of big company CEOs, was the source for the claim that employers could save $3,000 per worker on health care costs, the White House said.

Issued in November, the report looked generally at proposals that Democrats were considering to curb health care costs, concluding they had the potential to significantly reduce future increases.

But the analysis didn't consider specific legislation, much less the final language being tweaked this week. It's unclear to what degree the bill that the House is expected to vote on within days would reduce costs for employers.

An analysis by the Congressional Budget Office of earlier Senate legislation suggested savings could be fairly modest.

It found that large employers would see premium savings of at most 3 percent compared with what their costs would have been without the legislation. That would be more like a few hundred dollars instead of several thousand.


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