Given the 9% rise this past year in health insurance premiums, when are we going to get revised estimates for Obamacare subsidies? Recall that the government is going to pick up a chunk of the insurance tab for those 133% above the poverty line and below. The estimated cost of the program was about $1 trillion over 10 years.
So what does this rise - after we were told that passage of the bill would "bend the cost curve down" - mean for the overall cost of Obamacare? How much more in subsidies are we going to have to pony up? How much higher can the cost of insurance go before we are bankrupting ourselves?
Over the last decade, however, employees have steadily been paying more for their employer-sponsored premiums: The Kaiser report shows that since 2001, overall family insurance premiums have risen 113% (from $7,061 to $15,073 annually), while the amount workers contribute to these premiums via deductions from a paycheck have soared 131% over the 2001-2011 span ($1,787 to $4,129).
What's more, while the increase of a mere 3% in the portion paid by employees seems reasonable-basically keeping pace with inflation-it's more and more likely that workers have to pay more out of pocket for actual health services. Currently, 31% of workers are in plans with a deductible of at least $1,000. In 2010, 27% of employees were in such plans, and in 2009, only 22% could expect to be on the hook for $1,000 or more in deductibles if their families needed health care. So, in all likelihood, the typical employee is facing an increase of much more than 3% in health care costs.
The effects of ever-pricier health care hits Americans in other ways as well. One reason wages have remained stagnant is that employers are paying more for employee health insurance premiums-money that might otherwise go to bumps in salaries. Labor Department statistics show that both consumer spending and average incomes declined last year-and both of those slowdowns significantly slow down the economy as a whole.
Solutions to rising health insurance costs will not come from government - obviously. But we've gotten on the wrong track with Obamacare and repealing the mistake should be a top priority.