Wednesday, September 28, 2011

In Year 1 of Obamacare, family insurance premiums rise 9%

Despite the many flaws in our healthcare system, one positive trend in the 2000-2010 decade was that family health insurance premiums increased by smaller and smaller amounts each year, as you can see in the chart on the right. In 2002, premiums rose by an eye-popping 13.3%. By 2010, however, the annual increase in health premiums was down to 2.9%. It seemed that insurers were finally figuring out how to keep costs down. And Obama promised that his new healthcare plan would also help to lower insurance premiums.

Except that in the year after ObamaCare, insurance premiums rose by 9.5%, the highest annual increase since 2004.

Some ObamaCare defenders are blaming "bad forecasts," although it's hard to imagine why the forecasts would be that much worse in 2011 than in 2010. More likely is that Hewitt Associates and the AARP was correct in predicting that ObamaCare would cause substantial premium increases. After all, if Obama's plan did actually lower costs, then why would he need to hand out all those waivers?

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