Citing ObamaCare's costly new provisions, insurers are beginning to inform regulators that they have no choice but to pass resulting costs on to consumers.

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In selling ObamaCare to a renitent nation just six months ago, proponents swore that it would restrain health spending and insurance costs. 

To lubricate public acceptance, they even frontloaded the bill’s benefits so that the gain would arrive before the pain, making Republican efforts to repeal less popular.  For example, the bill eliminated coverage limits, required coverage of “children” up to age 26 and prohibited copayments for preventive services.  That sort of gimmickry explains why Nancy Pelosi felt confident enough to infamously announce, “We have to pass the bill so that you can find out what is in it.” 

This week, two early and stinging correctives to ObamaCare’s unsustainable promises arrived. 

First, health insurers including BlueCross BlueShield and Aetna revealed premium increases between 1% and 9% as a direct result of new mandates imposed by ObamaCare.  Citing the law’s costly new provisions, insurers are beginning to inform regulators that they have no choice but to pass resulting costs on to consumers. 

Like clockwork, the Obama Administration broadly demonized health coverage providers by suggesting that they’re using ObamaCare mandates as a mere pretext for gouging.  White House Office of Health Reform Director Nancy-Ann DeParle said, “I would have real deep concerns that the kinds of rate increases that you’re quoting are justified,” and that premium increases were “already their modus operandi before the bill.”  Ms. DeParle didn’t bother to offer any novel economic theory on how insurers can dismiss ObamaCare’s cost increases into thin air. 

Not to be outdone, Congressman Pete Stark (D – California) alleged, “Insurers are using the consumer protections in health reform as cover for their own greed.”  Those aren’t the words of some irrelevant outlier – Stark is Chairman of the House Ways and Means Health Subcommittee. 

Offering a more sober explanation, America’s Health Insurance Plans President Karen Ignagni stated the obvious:  “Anytime you add a benefit, there are increased costs.” 

Also this week, the federal Center for Medicare and Medicaid Services announced that ObamaCare will not in fact control medical spending over the upcoming decade, as proponents had promised.  Back in February, the Center projected that nationwide healthcare spending would rise at an average of 6.1% over the next ten years.  Today, recalibrating after the passage of ObamaCare, the Center projects an increase of 6.3% per year.  Thus, as reported in Health Affairs, ObamaCare has only increased spending growth estimates: 

“Relative to our February 2010 projections under prior law, average annual growth in national spending over the projection period is estimated to be 0.2 percentage points higher than our previous estimate.  The health care share of gross domestic product (GDP) is expected to be 0.3 percentage points higher in 2019.” 

The report further admits that nationwide medical expenditures will jump by $10.2 billion over the next three years alone, with an additional 9.2% increase in 2014 when insurance coverage regulations of ObamaCare arrive. 

So rather than control health insurance costs and overall spending, it turns out that ObamaCare will actually increase both.  But other than that, Mrs. Lincoln, how was the play? 

Unfortunately, the news gets even worse for Medicare recipients. 

Due to ObamaCare’s mandates, Medicare chief actuary Richard Foster reports that reimbursement rates to hospitals and physicians will be cut 30% during the next three years alone, falling below Medicaid payment rates.  The report further notes that ObamaCare will cut over $1 trillion from Medicare over the coming decade, and almost $5 trillion over the next two decades.  As it is, two-thirds of hospitals lose money treating Medicare recipients, so the future for Medicare looks grim. 

Accordingly, the Obama Administration and Congressional Democrats cannot scapegoat “greedy” private insurers for ObamaCare’s woes, because government-run Medicare expects to suffer even more severe repercussions. 

Rarely have the negative consequences of toxic public policy manifested themselves this immediately.  As commentator Larry Elder would say, the ObamaCare fit is already hitting the shan.