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Maybe they just have trouble with math?

Orginally posted at Eclectablog.

The GOP has taken a new tack in its endless and expensive effort to derail the Affordable Care Act. Recently they have been sending out an email that says, "Since President Obama took office, the average family has seen their health care premiums increase by $3,500 a year...ObamaCare enrollment doesn't start until October 1st, but health care premiums for American families have already gone up by $3,500 a year under President Obama's policies - and are expected to skyrocket even more." In what has got to be one of the most hilarious bits of irony of the year, the email is titled "Help spread the truth."

I dug into this and the claim that health care costs for families have gone up $3,500 since President Obama took office appears to come from a blog entry by an almost unknown conservative internet radio host Sara Marie Brenner, titled "Obamacare: It’s Not As Bad As You Think – It’s Worse".

Here's what Brenner concluded:

It is the beginning of the President’s 2nd term, and rather than premiums decreasing by $2,500, the typical family’s health insurance premium has increased by $3,500 annually. In 2008, the average cost for family coverage was $12,298, increasing to $15,545 in 2012.

For the mathematically challenged, President Obama, this is a 60% shift from the promised result enacting Obamacare would bring to premiums paid.

There's more hilarious irony here given Brenner's use of the phrase "mathematically challenged". First of all, according to the Kaiser Family Foundation, The average cost of health care premiums in 2008 was $12,680, not $12,298. And in 2012, it was $15,745, not $15,545. That's a difference of $2,865. Even if you use her incorrect numbers, she didn't even do the basic subtraction correctly! $15,545-$12,298 = $3,247, not $3,500.

UPDATE: I completely missed this but both Brenner's post and the GOP email claim that costs have gone up by $3,500 annually. I assumed they meant since he became president (i.e., four years.) They haven't even gone up that much in four years. Hat tip to JerryNA in the comments for catching that.

But, okay. We'll grant her the basic math errors. Costs HAVE gone up under President Obama. However, they have gone up less during his time in office than they did during President Bush's reign of error. Here's the data for annual family premiums from the Kaiser Family Foundation report (pdf):

So, yeah, while health insurance costs have continued to rise, they haven't increased any faster than they had been before President Obama took office. In fact, once you start digging into the numbers -- and if you can actually add and subtract and divide with any sort of skill at all -- you begin to see that, despite the fact that the Affordable Care Act is just getting started, the rate of health insurance cost increases has actually dropped since 2009 when Barack Obama was sworn in as president.

During President Bush's eight years in office, annual premiums for a family increased from $7,061 to $13,375, an increase of $6,314 or, on average $789.25 per year. Adjusted for inflation, costs went from $9,313.50 to $14,653.21 or $667.46 per year.

When President Obama took office in 2009, annual premiums for a family were $13,375 and four years later have risen to $16,351 for an average of $744 per year. Adjusting for inflation, costs started at $14,653.21 for an average increase of only $424.45 per year.

No matter how you look at it, the rate of health care cost increases has reversed under President Obama.

It's worth noting a couple of other things, as well. First of all, the Affordable Care Act wasn't even passed until 2010, a quarter of the way through his first term. Also, many of the cost-saving elements of the Affordable Care Act, including the health care exchanges, haven't even started yet! The state health care exchanges that have already released costs are showing considerably lower premiums than were anticipated. In New York, for example, they will drop by half!

State insurance regulators say they have approved rates for 2014 that are at least 50 percent lower on average than those currently available in New York. Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly. With federal subsidies, the cost will be even lower.

Supporters of the new health care law, the Affordable Care Act, credited the drop in rates to the online purchasing exchanges the law created, which they say are spurring competition among insurers that are anticipating an influx of new customers. The law requires that an exchange be started in every state.

UPDATE: Per a request by waterstreet2013 in the comments, here is some information about health insurance exchange rates in Maryland:
The Maryland Insurance Administration provided example 2014 monthly rates of nine proposed carriers for residents living in the Baltimore area.
  • For a 25 year old non-smoker enrolled in a bronze level plan, monthly premium rates will start at $124 per month.
  • For a 50 year old non-smoker on a silver level plan, the premiums will start at $267.

A report by the Maryland Health Connection compares its proposed premium rates to rates of 12 other states with available rate data. According to the report, Maryland is among the lowest of the 12 states. For example, a 50 year old resident enrolled in a silver plan in New York has an approved rate of $319 per month, while the same resident in Maryland has an approved rate of $260 -$269 per month depending on the region – 18% less in premium cost.

When compared to all of the available bronze plan proposals, Maryland had the lowest rates. The smallest premium on a bronze plan for a 25 year old in Maryland is $114, compared to $134 in Virginia, $146 in Colorado, $163 in Ohio, $167 in Washington State, and $174 in California.

Competition among insurers bringing down costs. Imagine that. The free market in action. Given their reverence and near-worship of the free market and competition that benefits consumers, you would expect that conservatives and tea partiers would be positively thrilled at this result. Why, in a rational world, they'd even be clamoring to bring back the idea of the public option!

As if.

But there's actually more to the story of what has happened to health insurance costs since President Obama took office. According to a recently released report from the U.S. Department of Health and Human Services, consumers have already saved $1.7 billion in 2012 alone, thanks to the Affordable Care Act:

An analysis from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) of rate review activities in calendar year (CY) 2012 shows that the rate review process saved consumers approximately $1.2 billion on their premiums when compared to the amount initially requested by insurers. These savings accrued to 6.8 million people. In the individual market, the average rate request increase dropped by 12 percent (from 8.1 percent to 7.1 percent) after rate review, saving consumers an estimated $311 million. Similarly, in the small group market, the average rate increase request declined by 19 percent (from 5.8 percent to 4.7 percent), saving consumers an estimated $866 million after rate review. This is in addition to the $500 million in medical loss ratio rebates for 2012, for a total $1.7 billion in savings in 2012.
What they are talking about here is the fact that insurance companies now have to justify double digit percentage increases in their premiums and the HHS is not having it in many cases. Additionally, they must spend no less than 80% of the premiums they receive (85% on for large group insurers) on actual medical care or they must refund the difference to their customers. This has resulted in significant numbers of Americans actually getting checks from their health insurance company like my pal LOLGOP did last year.

$1.7 billion in savings from Obamacare in 2012 alone. And upwards of $5 billion over the past two years. In other words, Obamacare IS a BFD!

Just wait until the health insurance exchanges start up next month. Suddenly, insurance companies will have to compete on a much more level playing field. When you can compare rates easily on a Travelocity-style website, the overly expensive companies are going to lose out to those offering their customers a good value. That's capitalism, kids. Good old-fashioned free market, the-consumer-is-the-winner capitalism.

It's enough to make Adam Smith weep with joy.

Originally posted to Eclectablog - eclectic blogging for a better tomorrow on Tue Sep 17, 2013 at 05:05 AM PDT.

Also republished by Maryland Kos.

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