In the latest round of what’s-happening-to-health-care-premiums, Republican Rep. Michele Bachmann wrongly claims that we’re seeing “huge increases” in employer-sponsored plans, while President Obama touts historically low health care inflation, which experts say is mainly due to the slow economy, not the health care law.
Both Bachmann and Obama were making competing arguments about the success of the Affordable Care Act, specifically on costs to consumers.
We’ll start with Bachmann, who made her comments on Fox News’ On the Record on Nov. 17.
Bachmann: We are seeing huge increases in these premiums, not only in the Obamacare exchanges, but in the private market. Because remember, a lot of times it’s the private market where we are getting health care through our employers. It’s the private market that has to offset government programs, whether its Medicaid or whatever government program. So the costs are going through the roof.
Her comment that there have been “huge increases” in the private market “where we are getting health care through our employers” is low-hanging fruit for fact-checkers. Employer-sponsored insurance premiums have been growing at low rates for the past several years. The average annual family-plan premium went up 3% from 2013 to 2014, according to the latest annual employer survey from the nonprofit Kaiser Family Foundation and Health Research & Educational Trust.
As the press release on the survey says: “Premiums increased more slowly over the past five years than the preceding five years (26% vs. 34%) and well below the annual double-digit increases recorded in the late 1990s and early 2000s. This year’s increase also is similar to the year-to-year rise in worker’s wages (2.3%) and general inflation (2%).”
We’ve explained before that a small increase in employer-sponsored premiums from 2010 to 2011 was linked to the Affordable Care Act’s elimination of preexisting condition exclusions for children, coverage of dependents on their parents’ plans up to age 26, free coverage of preventive care, and an increase in caps on annual coverage. At the time, experts estimated premiums had increased 1% to 3% due to those requirements.
Despite that, there has been a slow rate of growth for premiums for the 48% of Americans on employer plans recently.
While premiums have gone up slowly, deductibles also have increased. The percentage of covered workers on plans with a deductible was 63% in 2009 and had increased to 80% in 2014.
As we’ll explain, it’s unclear how much the Affordable Care Act has affected this slow growth of premiums. But, at any rate, it’s clear Bachmann is wrong when she says there have been “huge increases” and “costs are going through the roof.”