Some recent health insurance data, noted by John Graham of the Pacific Research Institute, tells a story (“If Health Spending Is Increasing Slower, Why Are Premiums Rising Faster,” January 2012). As one might expect when economic growth is slow, private health care spending has not increased as fast lately:
[T]he annual rate of increase in spending by private health insurance was 7.8 percent in 2007. It has dropped by more than two thirds to an annual increase of just 2.4 percent in 2010, according to data analysed by the federal government’s Centers for Medicare and Medicaid Services (CMS).
At first, health insurance premiums followed suit. The net cost of health insurance declined by 1.4 percent in 2008 and by 2.2 percent in 2009. Since Obamacare passed in early 2010, however, health insurance premiums and insurance company profits have spiked:
The “net cost of health insurance” jumped by 8.4 percent in 2010 […] . CMS’ analysts conclude that “for the first time in seven years, growth in total private health insurance premiums exceeded growth in total benefits” in 2010. […]
According to an analysis by Bloomberg Government, average operating profit margins for four of the largest insurers (UnitedHealth Group,
Aetna, Cigna, and Humana) increased to 8.24 percent in the 18 months after the law was signed, versus 6.88 percent in the 18 months before the law was signed.
It’s almost enough to make you think Obamacare isn’t working the way its supporters wanted it to. Didn’t they say the problem with health insurance was greedy insurance companies making too much profit?