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InsiderOnline Blog: March 2013

ObamaCare Magic Not Yet Working

Democratic strategist and ubiquitous talking head Donna Brazile is puzzled as to how health insurance premiums in 2013 could be going up—nearly three years since the passage of ObamaCare! Below, two of her tweets, one from March 2012, and the other one from just this week.

As Jim Geraghty at The Corner puts it, the real answer is probably not one that a fan of ObamaCare would consider good. For many people, the health insurance menu today is much more limited, thanks to ObamaCare. You can’t get a new plan that doesn’t offer the following: no lifetime dollar limits, coverage of children up to 26, no pre-existing condition exclusions for children under 19, and coverage of preventive care with no extra co-pays or deductibles. Insurance companies now are also limited in their ability to apply annual spending caps and must deal with additional red tape such as new reviews for rate increases and transparency requirements.

And since there’s no such thing as a free lunch, those costs get passed to the consumer.

But if Brazile thinks premiums are increasing too fast now, she’ll be really sad in 2014 when the combination of guaranteed issue and a weak individual mandate will create an adverse selection death spiral for private health insurance. Even MIT’s Jonathan Gruber, on whose work the original claim that ObamaCare would lower premiums is based, now thinks that the law will increase premiums when those provisions kick in. [See Avik Roy’s March 2012 Forbes article on Gruber’s change of mind.]

Posted on 03/01/13 01:45 PM by Alex Adrianson

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