About that $2,500 Health Insurance Savings Obama Promised Us...

In the run-up to the implementation of Obama Care in 2013, I threw a post on Facebook asking for any real-world examples of someone benefitting from the health insurance premium savings that Obama had promised. A primary piece of his sales pitch for the Affordable Care Act was that the average family would save approximately $2,500 per year on insurance costs due to government subsidies and the industry-wide cost reductions that the act would bring about. I never did hear from anyone whose premiums were reduced.

At the time, I don't recall any credible analysis to support Obama's claim. Having been reminded of the post by Facebook, I wanted to take a look at what actually happened with health insurance premiums since Obama Care became law.

The Kaiser Family Foundation provides a ton of analysis on the health care and insurance industries. It didn't take long to find year-over-year insurance premium data at their site.

The graph below plots both individual and family average annual premium costs beginning in 1999. As you can see, annual increases held steady from 2013 onward.

Would an average $2,500 reduction cause a noticeable blip in data like this? I would think so. But I'm not a statistics expert.

Another interesting chart from the KFF site shows increases in insurance premiums alongside overall inflation and earnings increases in 5 year increments. I'm not sure this tells us much more about the effects of Obama Care. But the premium increases in the first years of the century are staggering. Fortunately they were already falling. It's also good to see that the premium growth rate has largely stabilized...even if it is still significantly outpacing inflation and wages.

In the end, is doesn't appear that Obama's claims of premium saving held water. Much like "If you like your plan, you can keep your plan."