Arizona v. President Obama. This time it’s not about immigration but health care. A recent letter from the Arizona Department of Administration to 135,000 state employees informed them that, depending on their type of coverage, they can expect their monthly health insurance costs to jump by as much as 37 percent. The letter cites the President’s health care overhaul as “responsible for all increases for employee premiums.”
The Department points to two provisions of Obamacare as the primary reason for the premium increases: a new requirement for plans to cover children as dependents until age 26 and a ban on lifetime coverage limits. Both of these changes sounded popular during the health care debate. However, as citizens, like the Arizona state employees, begin to see the associated premium hikes go into effect, the highly unpopular new law will not likely gain more support.
Obamacare imposes a top-down approach to health care reform, requiring that insurance companies meet new requirements. Though some of these provisions are intended to protect consumers, what they don’t tell you is that it will inevitably mean higher premiums.
Increased premiums aren’t expected to hit state employees alone but will likely be a widespread effect of Obamacare. The Arizona Republic explains, “Because the state is one of Arizona’s largest providers of health insurance, its estimates could provide an early glimpse of how large employers will pass along health-reform costs to their employees.”
A better way forward would have been to put patients—not insurers or the government—in charge of their own health plans. By choosing what works best for them and their own personal situation, Americans would have been able to secure greater value at a better price. Heritage expert Ed Haislmaier explains here what a real consumer-driven market would look like.
President Obama promised that his health plan would lower premiums for American families by an average of $2,500. As we learn more about the new law, it becomes clear that this won’t be the case. As it turns out, there’s still no such thing as a free lunch.
This post was co-authored by Joshua Wade.