Correction: An earlier version of this blog post incorrectly stated that the Society of Actuaries is projecting that insurance premiums will rise. The projection was made by Dave Axene, a fellow with the Society of Actuaries. This post has been updated.
Greg mentioned this in today’s Morning Plum, but it deserves some further discussion: USA Today reports that Dave Axene, a fellow with the Society of Actuaries, is projecting that insurance premiums will rise around 7 percent next year. Their projection is in line with what others are estimating.
Combined with other data coming in, we can be pretty confident in saying that the “death spiral,” at least for the near future, is dead.
The death spiral, of course, was the concern that since the Affordable Care Act forbids insurers from denying anyone coverage based on pre-existing conditions, sick people who couldn’t formerly get insurance would flood the market, then premiums would explode because of the cost of insuring these people, and that would further discourage the young and healthy from getting insurance, and then the market would spiral down until it was destroyed in a fiery conflagration of misery and despair. Well, it doesn’t look like it’s going to happen.
If USA Today’s projections are accurate, premium increases next year will be about what they’ve been in recent years. To get a sense of the context, here’s a chart from the Kaiser Family Foundation showing single and family policy premiums over the last 15 years:
That doesn’t mean that people won’t blame any increase in their premiums next year on the ACA, because many of them will. We all have short memories. But the premium explosion Republicans predicted doesn’t look like it’s going to happen.
And let’s not forget that Republicans — and this is no exaggeration — were actually hoping for a death spiral. When they found out about the “risk corridor” provision of the ACA, which was a kind of insurance policy put in the law to prevent upheaval in the first years and forestall any possibility of a death spiral, they didn’t say: “Whatever else we think of the law, it’s a good thing that’s in there.” Instead, they condemned it as an “Obamacare bailout.”
And remember, some conservatives even launched an ad campaign to discourage young people from getting health insurance, in the hopes that keeping the young out of the market would undermine the insurance exchanges and result in an increase in premiums that could then be blamed on the Obama administration.
But new data from Gallup, which has been doing large surveys to assess who’s entering the insurance market, show that the campaign didn’t work. According to their data, four percent of American adults say they now have health insurance but didn’t last year. And among this group, 30 percent are between the ages of 18 and 29. Since that age group makes up only 21 percent of the adult population, that means young people are actually overrepresented among the newly insured.
There are no guarantees about what will happen next year, or the year after that, or the year after that. The recent slowdown we’ve seen in health care inflation could end, and costs could begin to rise again. Premiums could rise in the future. There’s a lot more work to be done.
And yes, Republicans will still be able to reap political gain, particularly in the short term, from bashing the ACA. Hardcore Republican voters will continue to despise the law no matter what does or doesn’t happen in the real world. And the GOP’s ability to get those voters to the polls will be a key determinant of the size of the Republican victory in the fall.
But as time goes by, the facts on the ground will become more and more important. And let’s be clear: None of the disasters Republicans predicted the ACA would produce have come to pass. It’s now safe to say that the biggest GOP prediction of all — the full collapse of the law — is just never going to happen.