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Were health insurance premiums growing at 15% before ObamaCare?

Welcome to VoteFacts.  President Obama told viewers this in an interview,

"What people forget is that the average premium was going up 15% a year before the Affordable Care Act."

(Watch the video in full by dragging start button backward.  Quote begins at 11 minutes 4 seconds.)

Let's Focus on Facts.  Were average premiums going up 15% a year before the Affordable Care Act (ACA)?   Recall that the ACA (Obama Care) was passed in March of 2010 but the complex law was to be rolled out over a multiple year period of time, with the big components like the mandate and the health insurance exchanges not even scheduled to begin until January of 2014 (both were delayed).  

Here is what the Congressional Budget Office (CBO) and Center for Medicare and Medicaid Services (CMS) have to say:

According to the raw numbers from the CMS:  In the year 2000, private health insurance premiums per enrollee grew at a rate of 6.6 percent, and by 2009 they were down to 5.0 percent.  They dropped again in 2010, before the ACA provisions took hold, to 3.7 percent, and then climbed again to 4.3 percent by 2012 followed by a downturn to 3.8 percent in 2013.  CMS Table 01

Nowhere in the CMS numbers is a 15 percent growth rate.  But let's keep researching.

The Congressional Budget Office (CBO)

"According to recent data on national health expenditures, private health insurance premiums per enrollee in the United States grew by 8.4 percent per year, on average, between 2000 and 2005 but by 5.3 percent per year, on average, between 2005 and 2010 - and by only 3.7 percent in 2010. CBO now projects that private health insurance premiums per enrollee will increase by 5.7 percent per year, on average, between 2012 and 2022."  CBO, Pages 5-6

So, the CBO projects that between 2012 and 2022, growth rates will be slightly faster than they have been most recently, and, in fact, faster than in 2009, before the ACA was passed into law.  Now let's look into some of the CMS reports.

The Center for Medicare and Medicaid Services (CMS) 

"Private health insurance premiums are estimated to have grown 1.8 percent in 2011 (and to have reached $864.4 billion), down from 2.4-percent growth in 2010.  This slowdown in growth is due primarily to a decrease in the number of people with private health insurance and a movement towards plans with higher cost-sharing and tighter restrictions on utilization, which dampened the growth in the use of covered services."

"Overall, premiums increased 3.2 percent in 2012, near the 3-4 percent in 2011."  CMS, Page 2

It is curious to consider whether most people would find that, "a decrease in the number of people with private health insurance and a movement towards plans with higher cost-sharing and tighter restrictions on utilization" as supportable reason for slower growth rates?  But that is a question each person must answer for themselves.

Another question to consider is...  If those slower growth rates were due to the provisions of the ACA, wouldn't that mean the slower growth rates should continue since the ACA is the law moving forward?  Unfortunately, that is not the case.  Here is what the CMS has to say about the future:

"Private health insurance premium growth is projected to reach 6.8 percent in 2014 due to higher per enrollee spending and increased enrollment through Marketplace plans.  Private health insurance spending growth is expected to remain somewhat elevated at 6.9 percent in 2015, primarily due to additional enrollment into health insurance plans. For 2016 through 2023, after the ACA-related enrollment shifts play out, the effects of improved economic conditions are expected to sustain average private health insurance spending growth of 5.4 percent per year."  CMS Report

Certainly 5.4 percent is better than most previous decades, but it is important to note that a) growth rates were not 15 percent before the ACA as the president claimed (and in fact they were slower as recently as 2008 than they are projected to be in the future) and b) the rate is expected to nudge up due to the ACA, not down, from where we have been in the recent past.  

You've researched beyond the talking point, now what say you?  Head on over and give your Fact or Fiction vote on the president's claim.

We focused on the president's claim in this clip that people will get "free preventive care" here, and his claim that, "there is nothing in the Affordable Care Act that would impact an employer sponsored plan" here.  Vote there as well.

Other valuable posts on health care:

Will the new health care law reduce the deficit?

Obama and the CBO report on individual market premiums.

Does Cuba have better health care than the U.S.?

Could Obamacare kill jobs?

Is congress exempt from Obamacare?

Does Obamacare cut Medicare?

Can you keep what you have if you like it?

Remember this from campaign '08:

“The time has come for a president who will be honest about the choices and the challenges that we face... Who won’t just tell you what you want to hear, but what you need to know, and... if you give me the same chance... I will be that president for America.”

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Health insurance premiums were growing at 15% before the Affordable Care Act. Fact or Fiction?
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Voting Key

Fact = 100% - 92% True
Mostly Fact = 91% - 75% True
Slightly Fact = 74% - 60% True
Split = 59% - 50% True
Slightly Fiction = 49% - 30% True
Mostly Fiction = 29% - 10% True
Fiction = 9% - 0% True