Obama’s Misleading Obamacare Claims
July 29, 2013
Supporters of Obamacare were given reason to celebrate on July 17 when The New York Timesannounced that health care premiums in the Empire State could “tumble” 50% because of the new health care exchanges. “Obama touted recent news from New York, California, Oregon and other states that have reported that insurance companies will charge lower-than-expected premiums next year,” reported the Los Angeles Times. “And he highlighted a provision of the law that requires insurance companies to provide rebates if they don’t spend at least 80% of the premiums they receive on their customers’ medical care, rather than administrative expenses, such as executive salaries or dividends for shareholders.”
This week, in his prepared remarks for Knox College, President Obama once again touted this 50% decrease in premiums, saying: “Just last week, New York announced that premiums for consumers who buy their insurance in these online marketplaces will be at least 50% less than what they pay today. That’s right—folks’ premiums in the individual market will drop by 50%.”
This feather in President Obama’s cap serves as an example for some liberals of how the Affordable Care Act is just that—an affordable way to purchase health care for your family, coming soon to a state near you.
Except that it isn’t. As Accuracy in Media has repeatedly demonstrated, in reality, Obamacare instead causes health care premiums to skyrocket—even in the much-touted California market. According to Avik Roy of Forbes, however, Obamacare will increase individual health insurance premiums [in California] by 64 to 146% in one year.”
For New York State it is a different story. That’s because a series of “reforms” made there in the 1990s which over-regulated health care, got rid of preexisting conditions, and mandated that insurance companies charge the same regardless of age, according to Roy. “New York premiums have nowhere to go but down,” charges Roy in his latest article for Forbes. As he previously pointed out, when liberals championed the less-than-expected rate increases in California, this was an “apples to oranges” comparison.
“The real news is that New York ruined its individual insurance market two decades ago by imposing the same regulations that ObamaCare is about to impose on every other state,” argued The Wall Street Journal on July 23. “If the Empire State’s premiums do now fall, it will be because the Affordable Care Act partially deregulates New York insurance.” Perhaps someone should have clued President Obama into this simple fact.
“But New York, today, is in worse shape than Washington, and far worse shape than California,” writes Roy in his incisive column. “In 2010, according to the Kaiser Family Foundation, the average premium in the New York individual market was $357 a month.”
The New York Times, in its oft-cited article, said that “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.”
At least the Los Angeles Times had the conscience to write that these types of “savings” are an aberration. “New York, for example, announced this week that the average premium will be 50% lower for individuals who buy health coverage on their own,in large part because the state has some of the highest rates now,” they report (emphasis added). “New York may have been more ripe for savings than other states,” notes Bloomberg.
And even The Washington Post, a champion of Obamacare, points out, “But it shouldn’t be shocking: New York has, for two decades now, had the highest individual market premiums in the country.” USA Today led with the title “Most states won’t see N.Y.’s drop in insurance rates.” This The New York Times cleverly left out of its reporting.
While conservatives might be surprised that New York’s rates are, indeed, going down, Roy puts this in perspective: “As a result, Obamacare does have the effect of lowering premiums in New York, to a weighted average of $301 a month: a 39 percent decrease from 2013 rates, and a 16 percent decrease from 2010 rates,” he writes. “According to several studies of the New York market, the biggest driver of the improvement is the fact that the mandate and the subsidies will encourage healthier people into the insurance pool, driving average costs down” (emphasis added).
This assumes that additional healthy people will add themselves to the rolls of the insured, instead of simply enduring the federal penalties. “The younger and healthier crowd is generally the group facing the most significant increases that are more likely to decide to pay the penalty and not buy health insurance next year,” Carl McDonald, a “Citigroup insurance-industry analyst” told Bloomberg.
As for The New York Times, it “inflated the impact of the ACA, implying that average premiums in New York City exceed $1,000 today vs. $308 under Obamacare; by our analysis, using a fairer comparison, the five-borough average for affordable coverage was $695, with a much lower average upstate,” writes Roy.
CBS News, in its report, accepted the $1,000 number and failed to mention that New York had high health insurance rates.
“New York’s rates will still be three times higher than those found in California before Obamacare,” Roy writes.
As a New Yorker myself, I have to say, if this is success, count me out.
This column was first published at Accuracy in Media.
Bethany Stotts is a freelance writer, and former staff writer for Accuracy in Academia. She blogs at http://bethanystotts.wordpress.com. This article is an exclusive appearing at Accuracy in Media.