April 8, 2013
President Barack Obama and his fellow Democrats sold many Americans on the Affordable Care Act largely by emphasizing two arguments: The law would help to reduce overall health-care costs, and it would provide health insurance to those who, for financial or health reasons, cannot get it now.
Unfortunately, both of these arguments are flawed. The law creates market distortions that will significantly raise premiums and costs for many Americans — including some middle- income families. And there are less costly, less distortionary and less intrusive ways to address the problem of the uninsured.
Two recent independent and nonpartisan studies help to explain how the law fails in its mission.
The first is from the Society of Actuaries, a group representing professionals who measure and manage financial risk. The main conclusion is that individuals and families who purchase their health insurance in the non-group (basically the non-employer-based) market will have to pay higher premiums. This is because the law will increase by 32 percent the costs that insurers must cover for health-care services, the largest driver of health-insurance premiums.