Obamacare’s Unkept Promises

Obamacare’s Unkept Promises
October 14, 2011

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)

In 2008, Barack Obama promised voters that if he was elected, his health care reform would reap the average family enormous benefits by solving the most tangible problem with health care: rising premium costs.

Obama promised his administration would "have a health care plan that would save the average family $2,500 on their premiums." Yet since the president passed his health care law, with exclusively Democratic support in Congress, health premiums have risen.

A new study conducted by the Kaiser Family Foundation illustrates the problem. The average employer health insurance premium rose by 9 percent this year, three times the increase of 2010, and family premiums exceeded $15,000 a year for the first time. In some states, premiums rose by even more.

Instead of reconsidering their policy approach or looking for real solutions to this problem, the White House is simply breaking many of the promises the president made before the law passed—such as his oft-repeated claim, "If you like your current health care plan, you can keep it."

White House Deputy Chief of Staff Nancy DeParle, one of the president’s leading health care policy advisors, told ABC News last week that when Obama said that, he really meant something else altogether.

"What the president promised is that under health care reform, that he would make it more possible for people to have choices in these exchanges," DeParle said. "The president wasn’t saying the legislation would guarantee that everyone can keep his or her preferred plan, just that the legislation wouldn’t force anyone to change."

This distinction should come as a surprise to anyone with a basic understanding of the English language. But it’s probably not much of a surprise to major employers, who are increasingly considering dropping coverage for their employees. Again according to Kaiser—a foundation headed by a prominent Obama donor—employers are responding to the law by shifting more costs onto employees.

If these trends continue, a recent study by the National Bureau of Economic Research indicates millions more Americans than the White House initially estimated will have their coverage qualify as "unaffordable." This will allow their employers to shift them to the taxpayer-subsidized coverage of the health care exchanges, changing their plans and increasing the cost of Obama’s law by as much as $50 billion per year.

DeParle also claimed the $2,500 savings figure is still true—but that families won’t see those savings for another eight years, in 2019. She also scaled the figure back to "around $2,000" in savings.

For families increasingly challenged by the rising costs of health care premiums in a stagnant economy, this is too little, far too late. A promise delayed is a promise broken, Mr. President.

To understand how significant these costs are for the average household, consider a recent study published in Health Affairs, which found that for the average family the rising costs of health care have effectively wiped out the income gains of the entire past decade. Just bringing the cost of health care premiums in line with the pace of inflation would be like a $545 increase in monthly income.

All these trends are likely to continue under Obama’s law, assuming it survives its current political and legal challenges. The president is essentially asking us to accept his assurance that these trends will change, even while he goes back on the extravagant promises he made in order to gin up public support.

The question for the American people now is whether we are really willing to wait until 2019 to see whether Obama can keep his latest revised promises. And what if we do wait that long, and find out he was wrong?

Benjamin Domenech (bdomenech@heartland.org) is a research fellow for The Heartland Institute and managing editor of Health Care News.

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)