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Insurance Premiums Would Be Nearly 25 Percent Lower If ObamaCare Hadn't Become Law

11/01/2015

Much of the recent news covering the failures of ObamaCare have focused on the collapse of the nonprofit cooperatives authorized by the law. Just last week, for example, Utah's cooperative became the tenth to fail. Billions of taxpayer dollars were spent to get these insurance cooperatives off the ground, a compromise for Democrats who wanted a single-payer option, and they have proven to be unsustainable. But another failure of the law is rising insurance premiums on the individual health insurance market.

In June 2007, during in his first campaign for the White House, Senator Barack Obama, promised that insurance premiums would fall by $2,500. Promise broken. Premium hikes on the individual market have been well documented since before the first ObamaCare open enrollment period began in 2013.

A December 2013 analysis from eHealthInsurance.com, for example, noted that premiums for individual health plans increased by an average of 37 percent between 2005 and 2013, before the full impact of the law was felt on the market. The average premium increase for individual health plans between 2013 and 2014, after ObamaCare was fully implemented, was 39 percent.

Though this particular narrative is a worthy point, a study recently published by Brookings Institution offers a look at ObamaCare's impact on the individual insurance market from a different perspective. The authors of the study look at trends in the states and found that premiums increased in 2014 far beyond what they would have had ObamaCare not been law.

"In the vast majority of states, in the first quarter of 2014 premiums rose relative to state seasonally adjusted trends. Health insurance premiums almost always go up, but it is striking that they went up so much relative to trend," Amanda Kowalski explains. "Across all states, from before the reform to the first half of 2014, enrollment-weighted premiums in the individual health insurance market increased by 24.4 percent beyond what they would have had they simply followed state-level seasonally adjusted trends."

In other words, premiums for plans available on the individual market were up nearly a quarter of what they would have been through the first half of 2014 had ObamaCare never been passed. Now, it is important to point out that these are unsubsidized premiums. The monies used to subsidize coverage are not, however, created out of thin air; those costs fall on taxpayers, who are bearing the weight of the premium increases caused by ObamaCare.