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Chuck Schumer’s very odd double-digit insurance cost increase claim.

So this video of a report on the news that people’s health premiums may be going up significantly next year (the number quoted was 10%: that will be important in a moment) is going around. It shows, in fact, Senator Chuck Schumer (D, NY) making what turned out to be a couple of fascinating comments along those lines:

Here’s the transcript of the relevant commentary from Sen Schumer:

“Our insurance department is empowered to protect families, and we’re going to watch them like a hawk to make sure that they do, because it they don’t these, these rates could go through the roof.”

“Is it because of Obamacare?”

“It’s in part because of Obamacare, but health care has been going up in double digits for years and years and years…”

Now that‘s interesting. Not just because of the accidental admission by Schumer that Obamacare is going to raise your rates (which, by the way, President Obama promised wouldn’t happen): but also because I’m not exactly sure where the Senator got that double-digit thing.

Below is a chart of average Annual Single Premiums (ASP) and Annual Family Premiums (AFP) from 1999 to 2012 (data from Kaiser’s EHBS 2012 Employer Health Benefits Survey):

Increase Increase
Year ASP Annual Cumulative AFP Annual Cumulative
1999 $2,196 0% 0% $ 5,791 0% 0%
2000 $2,471 13% 13% $ 6,438 11% 11%
2001 $2,689 9% 22% $ 7,061 10% 22%
2002 $3,083 15% 40% $ 8,003 13% 38%
2003 $3,383 10% 54% $ 9,068 13% 57%
2004 $3,695 9% 68% $ 9,950 10% 72%
2005 $4,024 9% 83% $10,880 9% 88%
2006 $4,242 5% 93% $11,480 6% 98%
2007 $4,479 6% 104% $12,106 5% 109%
2008 $4,704 5% 114% $12,680 5% 119%
2009 $4,824 3% 120% $13,375 5% 131%
2010 $5,049 5% 130% $13,770 3% 138%
2011 $5,429 8% 147% $15,073 9% 160%
2012 $5,615 3% 156% $15,745 4% 172%

Those numbers, by the way, reflect employment-based insurance, which is enjoyed by 55% of the population. According to the 2010 Census, only 9.8% of the population has direct-purchase insurance. Those numbers also represent the total cost per worker/family: Kaiser determined that in 2012 the average worker paid “$4,316 toward the cost of their coverage.” As you can see, we haven’t seen double-digit growth per year in years. [The 'cumulative' numbers were added as a comparison between the listed year and 1999, mostly to give you an idea of how expensive things have gotten since a decade ago; but what Schumer was referring to was a double-digit increase each year, not a double-digit one using a arbitrary baseline of 1999.  Unless he was being even more imprecise than usual.]

Well, maybe Schumer meant that worker contributions have been going up in double digits for years and years and years. Kaiser, again:

Year Small Firm Annual Inc Large Firm Annual Inc
1999 $ 1,831 0% $ 1,398 0%
2000 $ 1,940 6% $ 1,453 4%
2001 $ 2,254 16% $ 1,551 7%
2002 $ 2,647 17% $ 1,893 22%
2003 $ 2,970 12% $ 2,146 13%
2004 $ 3,382 14% $ 2,340 9%
2005 $ 3,170 -6% $ 2,487 6%
2006 $ 3,550 12% $ 2,658 7%
2007 $ 4,236 19% $ 2,831 7%
2008 $ 4,101 -3% $ 2,982 5%
2009 $ 4,204 3% $ 3,182 7%
2010 $ 4,665 11% $ 3,652 15%
2011 $ 4,946 6% $ 3,755 3%
2012 $ 5,134 4% $ 3,926 5%

Kaiser defines “small firms ” as those with between 3 and 199 workers, and “large firms” as those with 200+ workers. This table shows that, indeed, in the first part of the decade people working for small firms had several years in a row of double-digit increases in their average contribution. However, small firm workers also saw years where their average contribution decreased; and their contributions for the last few years have largely not been double digit. Large firm workers have themselves mostly seen single-digit increases – particularly, again, in the last five years.

Now, I am just this guy on the Internet, but based on this information it looks like, no, health care has not been going up in double digits for years and years and years. It in fact looks like that the rate of increase had been going down for a few years, then took a rather large jump in 2011… which, probably not coincidentally, is the year after the Democrats (led, in large part, by one Senator Chuck Schumer) slapped a gigantic parking brake on the economy and called it “Obamacare.” And it looks like worker contributions had taken a big jump in 2010 – in anticipation of Obamacare costs? – with periods of significantly smaller cost growth before or after that period.

Now, I am willing enough to believe that I may have missed a memo or two, here – but if Chuck Schumer didn’t mean average premium rates for employer-based insurance – which, again, is what a majority of the population has – then what did he mean when he said that rates were going up for years and years and years?

Moe Lane (crosspost)

PS: I’ve been told that insurance premiums for companies can and do go up significantly.  But Schumer wasn’t talking about that; he was clearly saying that rates for consumers have been rising by double digits per year.  I really do think that he should clarify further than he has (see below).

PPS: Schumer has since walked back the double-digit claim, sorta:

“The rise in healthcare premiums is market-driven and predates Obamacare,” Schumer said in a statement provided exclusively to TPM. “The fact is, the law is already working to significantly slow that rise, and ensure a higher quality of care to boot.”

Only problem is, we still don’t know where he got that double-digit claim from in the first place. Well, that and the fact that the rate apparently increased right after Obamacare was passed. Or – if you’re assuming that Sen Schumer meant worker contributions – it’s only recently increased by double digits once: the year that Obamacare passed.

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