In 2010, the Obama administration excoriated health insurance companies for “rate hikes as high as 39 percent.” HHS Secretary Kathleen Sebelius wrote:
This is unacceptable…
President Obama has offered a health insurance reform proposal to help working families and small business owners. It will hold insurance companies accountable by laying out common‐sense rules of the road to keep premiums down…
Reform will change the rules and help stop exorbitant increases.
And the President’s plan will help reduce costs…
According to the Chicago Sun‐Times, that double‐digit rate increase “helped dramatize the need for regulation.”
That episode came to mind this morning when I read about a survey of health insurers that shows ObamaCare will neither “keep premiums down” nor “stop exorbitant increases” nor “reduce costs”:
The survey, fielded by the conservative American Action Forum and made available to POLITICO, found that if the law’s insurance rules were in force, the premium for a relatively bare‐bones policy for a 27‐year‐old male nonsmoker on the individual market would be nearly 190 percent higher…
Most other studies have tried to estimate average premium increases, which have ranged anywhere from negligible to 85 percent and higher. This survey looks at individual examples in specific markets to show the itemized impact of the major Obamacare reforms…
On average, premiums for individual policies for young and healthy people and small businesses that employ them would jump 169 percent, the survey found.
These findings are in line with projections by neutral observers and even ObamaCare supporters like MIT economist Jonathan Gruber that the law will increase premiums for some individuals and small businesses by more than 100 percent.
If double‐digit premium increases dramatized the need for regulation, do triple‐digit increases dramatize the need for its repeal?
Politico offers a strange rationalization for these rate hikes:
The increase will most likely be substantial for “a slice of the younger population,” said Massachusetts Institute of Technology health economist Jon Gruber, a supporter of the health law who has studied its impact on premiums.
And those are the people who, before Obamacare, benefited from insurers’ ability to charge older, sicker people much higher rates — or deny them coverage altogether — practices that have kept premiums for the young low.
Set aside the fact that these rate hikes effectively tax young workers to subsidize older workers who generally have higher incomes. According to this theory — I can’t tell if it came from Gruber or Politico — those young workers are today unjustly enriched because they’re not being robbed.