October 10, 2013
By Nina Owcharenko
President Obama made a variety of overly optimistic claims about what consumers can expect to pay for coverage acquired through the exchanges when open enrollment begins next week. Indeed, he asserted, coverage under Obamacare will be so affordable, it will cost less than your monthly cell phone bill.
He prominently touted big premium reductions in New York, California, and Illinois. But, as Avik Roy has pointed out (here and here), highlighting those states is suspect.
Contrary to the president’s bold claims, just hours after his remarks, the Department of Health and Human Services released a report on premiums in the exchanges of certain states that told a different story. While the report lacked critical information about what specific plans will cost specific individuals in the exchanges, it did show that the average state exchange consumer will face coverage costs far greater than their cell phone bills.
The administration’s report focused on plans with the lowest premiums. Still, it showed that, “In 15 states, the second lowest cost silver plan will be less than $300 per month.” And for young adults, “The weighted average lowest monthly premiums for a 27-year-old in 36 states will be (before tax credits): $129 for a catastrophic plan, $163 for a bronze plan, and $203 for a silver plan.”
As both President Clinton and President Obama emphasized, the success of Obamacare’s exchanges depends heavily on enrolling young, healthy people. And at these prices, even with a tax credit, Obamacare might be a hard sell for that audience. Many might simply opt to pay the much less expensive individual mandate ($95 a year or 1 percent of their annual income next year), rather than buy such expensive coverage. If they opt out, premiums in Obamacare’s exchanges would be even higher for everyone else.
Open enrollment begins in less than a week, and rational consumers will make rational choices about whether or not they can afford Obamacare. As the president said, “Rather than try to disabuse people of every single bit of misinformation that’s been out there, what we’re saying is, just look for yourself.”
Unfortunately, that suggestion may come back to haunt the president as have all the other broken promises of Obamacare.
Nina Owcharenko is Preston A. Wells fellow and director of The Heritage Foundation’s Center for Health Policy Studies.
Originally published by National Review Online
Director, Center for Health Policy Studies and Preston A. Wells, Jr. Fellow
Read More >>
Request an interview >>
Please complete the following form to request an interview with a Heritage expert.
Please note that all fields must be completed.
Heritage's daily Morning Bell e-mail keeps you updated on the ongoing policy battles in Washington and around the country.
The subscription is free and delivers you the latest conservative policy perspectives on the news each weekday--straight from Heritage experts.
The Morning Bell is your daily wake-up call offering a fresh, conservative analysis of the news.
More than 200,000 Americans rely on Heritage's Morning Bell to stay up to date on the policy battles that affect them.
Rush Limbaugh says "The Heritage Foundation's Morning Bell is just terrific!"
Rep. Peter Roskam (R-IL) says it's "a great way to start the day for any conservative who wants to get America back on track."
Sign up to start your free subscription today!
The Heritage Foundation is the nation’s most broadly supported public policy research institute, with hundreds of thousands of individual, foundation and corporate donors. Heritage, founded in February 1973, has a staff of 275 and an annual expense budget of $82.4 million.
Our mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense. Read More
© 2014, The Heritage Foundation Conservative policy research since 1973