Alexander: Non-Partisan CBO Finds Health Insurance Premiums to Keep Rising Despite Obamacare’s Promise to Lower Costs
Study shows that “federal regulation is not the prescription for lower health care costs”
Posted on February 11, 2016
WASHINGTON, D.C., February 11 – A new study of Obamacare by the non-partisan Congressional Budget Office requested by Senate health committee Chairman Lamar Alexander (R-Tenn.) finds that health insurance premiums will continue to rise despite Obamacare’s federal takeover of health care.
Alexander said: “At the White House health care summit in 2010, I warned President Obama that his takeover of the health care system would increase individual premiums and this nonpartisan Congressional Budget Office report shows not only have they increased, but they will keep increasing. Obamacare has proven that federal regulation is not the prescription for lower health care costs. It was a takeover of the health care system, the federal pocketbook, and the family budget.”
“As Chairman of the Senate committee with primary jurisdiction over the private health insurance coverage, I am working on developing policies that build more flexibility and competition into the private health insurance market so we can start over, and go step by step to fix our broken healthcare system, increase choice and reduce costs so more Americans can afford to buy insurance.”
A Congressional Budget Office (CBO) report released today estimates that average premiums for private insurance will grow by about 5 percent per year, on average, over the next 10 years—about 2 percentage points faster than per capita GDP.
As a result of that growth, average premiums for employment-based coverage are projected to be about $10,000 for single coverage and about $24,500 for family coverage in 2025, nearly 60 percent higher than they were in 2016.
The CBO points to federal regulations under Obamacare that require individuals to purchase plans with specific “essential health benefits” and that mandate the share of costs for services (minimum actuarial value) that a health plan must cover as examples of policies that increase premiums. CBO reconfirmed its 2009 estimate, that when combined with the requirement to cover pre-existing health conditions, these three federal regulations alone would have made non-group premiums 27 percent to 30 percent higher in 2016 than they would have been otherwise.
Not only does this increase in premiums put pressure on a family’s budget, but it also threatens our nation’s fiscal health because under Obamacare the federal government subsidizes most premiums—directly or indirectly—at a cost of roughly $300 billion in fiscal year 2016, according to CBO.
For access to this release and the senator’s other statements, click here.