It's the heart of right-wing conventional wisdom: Obamacare is going make insurance premiums for everybody skyrocket. The Wall Street Journal calls it
"ObamaCare health-insurance sticker shock." The CEO of Aetna said
"somebody has to pay for" insuring all Americans. Fox News trumpeted
rising premiums for everyone.
As usual lately, conventional wisdom is having a big fail. Actually, according to a new report from the Obama administration, double-digit premium rate increases are falling. Dramatically. The researchers looked at 15 states that make requests for rate increases by insurers public, and saw rate increases plummet, at least in the individual plan market.
Since 2010, there has been a decline in the proportion of rate filings in which the requested increase is at or above the Affordable Care Act threshold of 10 percent. In 2010, 75 percent of rate filings requested increases of 10 percent or more, a proportion that dropped to 34 percent in 2012 (See Figure 1).
Here's Figure 1, because it's that impressive:
The researchers, and the administration, credit the Affordable Care Act and the "increased scrutiny that rate increases of 10 percent or more now receive." Because under Obamacare, insurance companies are required to provide public justification for rate increases of more than 10 percent. It's also possible that this years-long debate has heightened media attention in health insurers. Massive rate increases get media attention
. It's bad PR for insurers, and could lose them customers when insurance marketplaces are opened up in 2014.
These 15 states represent about a third of the entire individual market, making the findings pretty significant. However, the researches didn't see the same drop in rate increases on the group plan side of the market, where rate increases are more stable. This study does, though, reinforce similar findings from the Kaiser Family Foundation last fall. KFF concluded that the greater scrutiny on rate increases under Obamacare could account for reduced premium increases.