Obamacare Has Increased Cost of Health Insurance, Says Kaiser Foundation

Matt Cover | September 27, 2011 | 2:02pm EDT
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(CNSNews.com) – According to a Kaiser Family Foundation study of employer-provided health insurance plans, the ObamaCare health reform law could have accounted for as much as 50 percent of the spike in insurance premiums in 2011.

The Employer Health Benefits Survey by the Kaiser Family Foundation, which specializes in health care issues, found that health insurance premiums had jumped by 9 percent in 2011, up from a 5 percent annual increase since 2007.

Drew Altman, president and CEO of Kaiser, first said that the premium increase was not because of ObamaCare but then went on to say that the ObamaCare law probably accounted for 1 to 2 percentage points of that increase, which he further explained in a column today (see below).

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"In a world where some blame almost everything on what they call ObamaCare -- I certainly blame the collapse of my Red Sox on Obamacare -- one thing we can say about the premium increase this year is that it is not because of the Affordable Care Act," Altman told reporters in a conference call on Tuesday.

However, he continued, “Our analysis is that the Affordable Care Act [ObamaCare] could have been responsible for about one-and-a-half percentage points – we say 1 to 2 percentage points – of the increase that we’re documenting this year,” he said.

“And that reflects the costs of providing prevention benefits without cost-sharing,” he said. “It reflects the costs of covering young adults up to 26 years of age under their parents’ policies. Those are also very popular benefits, according to our tracking polls.”

Altman pointed out that the Affordable Care Act was not responsible for the entire premium increase, explaining that most health plans would be grandfathered in and would not be subject to the full force of the law’s new regulations.

According to the study, health insurance premiums for employer-provided coverage – the most common type – have been rising at a steady rate of about 5 percent each year.

President Obama signs the Democrats’ health care bill into law in the East Room of the White House on Tuesday, March 23, 2010. (AP Photo/J. Scott Applewhite)

This year, however, that rate jumped to 9 percent for family coverage and 8 percent for single coverage.

This means that ObamaCare was responsible for anywhere from 25 to 50 percent of the 4 percentage point jump in insurance premiums this year.

When later asked on the conference call to clarify about how ObamaCare could have been responsible for “1 to 2 percentage points – of the increase” in premiums, Kaiser Foundation Vice President Gary Claxton said: “Yes, that would be 1 to 2 percentage points of the 9 percentage points – 1/9 to 2/9, yes.”

When asked if that were insignificant, Claxton said, “No.”

In a column posted on the Kaiser Family Foundation Web site today, Altman explained that ObamaCare was responsible for a "modest" increase in insurance premiums.

He wrote: "Critics of the national health reform law passed in 2010 like to blame everything but the weather on 'Obamacare,' but regardless of how you feel about the Affordable Care Act, its effect on premiums this year is modest.  Most of the law’s provisions don’t go into effect until 2014.  The two biggest changes this year allow young adults up to age 26 to stay on their parents’ insurance policies and require some insurance plans to cover preventive services at no cost to patients.  These are popular provisions that provide real benefits, and combined they account for about one to two percentage points of this year's premium increase."

Furthermore, in the study's methodology there is an explanation of provisions in the Affordable Care Act (ObamaCare) have affected insurance premiums.  It states: "Our analysis, based in part on estimates provided by federal agencies when regulations implementing these provisions were issued, suggests that these provisions are responsible for 1-2 percentage points of the 9% increase in family premiums in 2011."

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