Just after midnight April 1, White House officials literally and figuratively popped open champagne as the open enrollment period ended with a reported 7.1 million Americans signing up for coverage through President Obama's health care law. That afternoon, Obama himself appeared in the Rose Garden to declare: “The Affordable Care Act is here to stay.”
It's important to focus on that word “affordable.” After all, when Obama was selling the health care plan, he vowed that it would reduce health care costs that were crushing individuals, businesses and the nation as a whole. But the opposite is the case.
On the campaign trail on June 5, 2008, after effectively securing the Democratic nomination, Obama declared, “In an Obama administration, we'll lower premiums by up to $2,500 for a typical family per year.”
In reality, his law piled on a heap of new regulations on insurance policies that drove up the cost of insurance, especially on younger and healthier Americans. A Nov. 2013 study from the Manhattan Institute looked at premiums in 49 states and found that on average, the base price of premiums went up 41 percent as a result of Obamacare.
In the coming months, insurers will have to submit premiums for 2015, and they're already warning consumers to brace themselves. "I do think that it's likely premium rate shocks are coming,” Chet Burrell, chief executive officer of CareFirst BlueCross BlueShield, told Reuters. “I think they begin to make themselves at least partially known in 2015 and fully known in 2016.”
During his health care pitch to the American people, Obama also vowed to make the system more affordable to businesses. But Obamacare imposes a raft of new requirements and regulatory red tape on businesses.
A recent study from the American Health Policy Institute analyzed the internal costs of Obamacare among more than 100 large employers (defined as having more than 10,000 workers). It found that over the next decade, these large employers would pay between $4,800 and $5,900 more per employee than they otherwise would have without Obamacare. In total, the study estimated, the cost of Obamacare to all large employers would be somewhere around $151 billion to $186 billion.
Then there's the nation as a whole. Obama vowed to bend the cost curve of health care down, warning that the status quo was unsustainable. But Obamacare spends $2 trillion over the next decade to expand insurance coverage, according to the Congressional Budget Office, and even including its offsetting changes to Medicare, it still isn't expected to reduce spending on health care.
In fact, according to actuaries at the Centers for Medicare and Medicaid Services, Obamacare will increase cumulative health spending by roughly $621 billion through 2022. Economic data from the fourth quarter of 2013, released by the Bureau of Economic Analysis, found that health spending grew at an adjusted annual rate of 5.6 percent in the fourth quarter of 2013, which would be the fastest rate since 2004.
So much for the “Affordable” Care Act.