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Roskam Opening Statement: Rising Health Insurance Premiums Under Obamacare

June 24, 2015

WASHINGTON, DC — Today, Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-IL) delivered the following opening statement during a hearing on the effects of the Affordable Care Act (ACA) on health insurance premiums.

“Welcome to today’s hearing. We’re here to learn more about the huge premium hikes insurance companies are currently proposing for 2016 under the so-called ‘Affordable Care Act.’

“For five years, the Obama Administration insisted that the law would reduce healthcare costs. President Obama said, ‘we can cut the average family’s premium by about $2,500 a year.’ The non-partisan fact checker Politifact called that a ‘broken promise.’ President Obama pledged that insurance premiums ‘will go down.’ The Washington Post’s fact checker rated that a ‘three Pinocchios’ lie. In fact, we’re five years in, and health insurance costs under Obamacare aren’t going down—they’re going up. Under the House Rules, our job at the Oversight Subcommittee is to evaluate the ‘application, execution and effectiveness of Federal laws,’ and today we are going to examine the impact of Obamacare on health insurance premiums.

“Now, for the first time since the ACA became law, insurers are able to look at a full year’s worth of claims data to calculate premium prices for the year ahead. The proposed premium hikes tell us a lot about how much healthcare cost last year and what insurers calculate healthcare will cost this next year. On June 1, CMS made public proposed premium hikes of ten percent or more for the 2016 plan year—and many of the proposed increases are eye-poppingly huge.

“In Maryland, CareFirst Blue Choice, which covers approximately 80 percent of the individual market, has asked for an average increase of nearly 30 percent. In Missouri, Coventry Health has requested an increase of 22.7 percent. In North Carolina, Blue Cross Blue Shield has asked for an increase of 25.7 percent. In Tennessee, Blue Cross Blue Shield has asked for an increase of 36.3 percent. In South Dakota, one of the largest insurers, Wellmark, has asked for premium hikes between 24 percent and 51.5 percent. It is noteworthy that in many states, the largest insurers are also the ones proposing the biggest increases, which is especially troubling, because they benefit from the most customer data on which to base their calculations.

“I could go on. But we need to remember that these prices have real consequences for real people. How many of us have gotten a 20 to 30 percent pay increase this past year? For Congresswoman Noem, how many South Dakotans have gotten a 50 percent pay increase this past year to keep up with the proposed 50 percent increase in the cost of their insurance?

“It is true that these are just proposals. Nothing’s been finalized yet. In 36 states, the state insurance authority must approve the increases, often after negotiation with the insurers. But there’s a reason insurers are asking for such big rate hikes. The Affordable Care Act hasn’t worked to lower costs, it’s actually driving them up.

“President Obama said that under the ACA, more people would have health insurance and so the use of costly emergency care would diminish. But in order to keep costs down, Obamacare compliant plans have relied on narrower provider networks, meaning fewer doctors and limited availability. Also, much of the law’s new health insurance ‘coverage’ came in the form of expanding Medicaid. Since many individuals can’t get in to see their doctors, and many more doctors aren’t taking Medicaid patients, the ACA is actually driving the number of emergency room visits up, just the opposite of what the President said would be achieved.

“Are these effects of the ACA just growing pains? To the contrary, the law created a number of temporary programs to pay out billions in taxpayer funds during the first few years to lower the costs seen by individuals and to protect big insurance companies against financial losses. But those programs are beginning to phase out, and as the government is slowly taking off the training wheels, Obamacare is looking pretty wobbly. Even with the billions and billions of taxpayer dollars spent to reduce the sticker price of insurance for individuals, to lower their out of pocket costs, to pump up big insurance companies, to establish and operate the insurance marketplaces, and more—all hidden and shifted costs paid for by you, the taxpayer, that most people forget to take into account—even with all of that, healthcare costs and health insurance premiums are still going up.

“On its website, the Department of Health and Human Services says, ‘A new wave of powerful evidence points to one clear conclusion: The Affordable Care Act is working to make health care more affordable, accessible and of a higher quality, for families, seniors, businesses, and taxpayers alike.’  But look at the facts: premiums are going up. Emergency room use is rising. Co-ops are failing. There’s certainly a wave of evidence. And it’s definitely pointing to one clear conclusion: Obamacare is not working.”