Premiums are only part of the story - the important number is health care costs. Obamacare plans must cover more expenses than pre-Obamacare plans were able to offer, so the premiums may be a relatively larger share of overall costs.
Premiums should, but really don't in a government manipulated market, directly relate to costs. Here, premiums can be defined as that portion of the true costs of providing medical care that the government chooses to let the insurance companies recover from the people they insure. Most of why Obamacare exchanges and plans have failed relates directly to the manipulation of premiums.
As Greg points out, the plans are required to cover more things (and to pay money out for those things), they are also barred from actually evaluating the likely medical costs of customer in deciding what to charge for their "insurance" including being required to accept payment obligations for known and costly conditions without any chance at charging the actual amount of such costs back to the customer. The only ways they can even pretend to make this work are to set deductibles so high that the average consumer receives little actual benefit from their insurance coverage in a given year (certainly less than the premiums they pay) or by direct government payments to the insurer to make up the difference.
Pretty much, exactly, what we said when the law was passed. And exactly what has played out in the exchanges.
This is a big increase in premiums - in fact, Obamacare premiums for policies offered on the exchanges had been trending below expectations (most recently 2% in 2015 and 7.5% in 2016), and this latest increase wipes out those savings. Average premium prices are almost exactly at the level that back in 2009 the Congressional Budget Office predicted for 2017. Seven years ago CBO predicted $5,538 as average premiums for 2017, and HHS is projecting average premiums for 2017 as $5,586. http://www.cnn.com/2016/10/25/opinions/affordable-health-care-exchange-premiums-jost/
Well again, changes in premiums are useless as a determination of cost specifically because the government directly manipulates them. They are manipulated both by price controls where an insurer has to get permission to increase them and get approval of the increase, and by direct subsidization - which because it occurs behind the scenes confuses people into not realizing its part of the cost of the product.
Government, could, if it chose literally make the premiums negative, they have absolutely nothing to do with the real costs.
There is also a clear pattern that states where they are trying to make Obamacare work are, unsurprisingly, having lower levels of premium increases. This is particularly noteworthy as some of the statistics cite premium growth as measured on states that use the federal Obamacare exchange, but remember those are primarily the sabotage states that have fought against Obamacare to the degree possible. States like California are seeing much lower increases (13% in 2017 after 4.2% in 2015 and 4.0% in 2016).
California, what an example. They forced insurers to cancel grandfathered plans (which is not the federal rule) to force more people into their exchanges, benefitted from the maximum in subsidies and the tightest in controls and still can not maintain their level of plans or cost ratios. Meanwhile they took full advantage of federal subsidies to increase their Medicaid roles by 5 million people, what's going to happen to their budget and healthcare costs when federal support expires? Yes, specifically government manipulation can keep a lid on the amount the consumer realizes that they pay (premiums) but ultimately we collectively still end up with the bill (CA is already one of the states that pays the highest portion of its tax revenue towards medical expenses, so ouch when federal subsidies expire (or even get distributed even across the other states)).
But still more can be done. Hillary Clinton is running on a platform that includes the so-called public option, in which states would be allowed to set up a government-run option to add competition into the marketplace. No one would be forced to use the government option, but it could help drive competition over prices, particularly in areas where there was limited price competition
That's not competition. State run companies don't compete at all. They are not subject to cost pressures, or quality pressures or any legitimate market forces. Their performance can be as horrid as it wants to be without consequence, their charges and costs bear no relationship to actual charges and costs. And they are highly subject to political based manipulation.
So what about the fact that the plans on the exchange, if you don't receive them as a government handout - I mean on a subsidized basis - cost so much and have such high deductibles, that rather than protect someone from bankruptcy, put them into bankruptcy? What about the fact that visits by patients with Obamacare are going down, specifically because they
can't afford to go to the doctor? What about the fact that all that is true, and at the same time the insurers themselves are largely incapable of making a profit (absent massive grants paid for by tax payers) and forced to raise the rates dramatically while increasing deductibles even further?
