Obamacare’s Soaring Price Tag

Photo: Emily Metcalf
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Photo: Emily Metcalf

On January 21, 2009, Barack Obama stood on the steps of the U.S. Capitol and, in his inaugural address, pledged to America that he would “wield technology’s wonders to raise health care’s quality and lower its cost.” What he did wield, of course, was a 2,000-page bill known as Obamacare. More than a year on, we now know that health care costs are soaring, and the President’s signature legislation is to blame.

Most Americans know that medicine is getting more expensive, but a new survey puts a shocking sticker price on the rapid increase. The Kaiser Family Foundation and the Health Research and Educational Trust report that between 2010 and 2011, family premiums increased by 9 percent and for individual premiums by 8 percent. According to the survey, “The average premium for single coverage in 2011 is $452 per month or $5,429 per year … The average premium for family coverage is $1,256 per month or $15,073 per year.”


What’s driving those costs? In large part, Obamacare. According to Kaiser Family Foundation CEO Drew Altman, the President’s health care legislation was responsible for approximately 20 percent of the increase in premiums. Heritage’s Kathryn Nix explains what parts of Obamacare are to blame:

Provisions of the law that have already gone into effect are driving up the cost of premiums, including requiring insurance plans to cover children up the age of 26 on their parents’ policies and requiring government-approved preventive care measures to be covered with zero cost sharing by all plans.

The bad news is that Americans can expect costs to go even higher. For starters, the full force of the law won’t even kick in until 2014–in other words, there’s an onslaught ahead. And even without Obamacare, premiums are skyrocketing and hitting small businesses. Just imagine what the future will hold. Nix warns that “already-enacted provisions are just the beginning,” and just next week, the Institute of Medicine will release its recommendations on what should and should not be covered under Obamacare’s “essential health benefits” package. What could be the result? Even larger premium hikes than we’ve already seen.

With the cost of health care growing so tremendously over the past decade (for families, 31 percent higher premiums today than in 2006, 113 percent higher than in 2001), one might think that the news media would begin to ask whether the very law responsible for even higher costs ought to stand. That question, though, is not being asked, and the issue of Obamacare’s contribution to increased costs is not being examined.

Fortunately, the very basis of Obamacare will face ultimate legal examination. Yesterday, the National Federation of Independent Business filed a petition with the U.S. Supreme Court appealing the 11th Circuit’s decision that the unconstitutional individual mandate could be severed from the Obamacare legislation. Twenty-six states, too, have lined up to argue their case before the Supreme Court, filing a petition for certiorari. Likewise, the Department of Justice yesterday asked the Court to review the lower court finding that the individual mandate is unconstitutional. The Washington Post reports that a decision will likely come next summer.

While America waits for a decision from the Supreme Court, Obamacare’s damage continues unabated. Families, individuals, and businesses are paying higher costs for health care. New regulations are exacting a heavy toll on job growth. And there are more regulations to come. The good news is that Obamacare is not the only option–real reforms can reduce health care costs for all Americans. And that change can come with repealing Obamacare, offering consumers more choices of coverage and full ownership of that coverage, and giving states greater latitude to experiment and innovate with health care programs, as Heritage proposes in its Saving the American Dream plan.

America’s health care system is already unaffordable, and Obamacare only makes it worse. Fortunately, there are conservative alternatives to the President’s flawed plan.