THE BLOG
12/01/2014 09:17 am ET Updated Jan 30, 2015

New Data Settles the Debate: Obamacare Is Making Health Insurance More Affordable, Not Less

It's that time of year again.

No, not the holiday season. I'm talking about Obamacare season.

In the second year of our new annual tradition, the exchanges are open for enrollment, which begs the question: What have we learned since last time? Were the naysayers proven right, or did Obamacare really make health insurance more affordable, as was intended?

With a new year of data to answer these questions, once more into the breach we go...

At this time last year, the inaugural enrollment period was not going well. The website was malfunctioning, people were losing plans they wanted to keep, and the media was running scare stories about "sticker shock." I argued, on the contrary, that the website would get fixed in a hurry, most people were getting better plans, and the exchanges were actually reducing the cost of health insurance.

The first prediction was clearly vindicated. The website got fixed, and 8 million Americans enrolled.

The second prediction was also a victory for Obamacare. Before the exchanges opened, 16.4 percent of Americans were uninsured. A year later, only 11.3 percent were uninsured.

And this isn't only due to the Medicaid expansion. In states that did not expand Medicaid, the uninsured rate fell from 18.2 percent to 13.8 percent. Clearly, the exchanges didn't just replace old plans. They created new ones for people who didn't have any.

They didn't reduce coverage. They expanded it.

And according to the latest Gallup poll, the people who got that coverage are just as happy with it as the people with non-exchange insurance -- and the people on the exchange are actually happier with their costs than everyone else.

Which brings us to the third prediction. This one was more controversial.

Earlier this year, I analyzed the many studies of pre- and post-Obamacare costs and came to the conclusion: "On average, Obamacare clearly lowered the cost of health insurance."

Two of the experts who wrote one of those studies, Paul Howard and Yevgeniy Feyman, disagreed with me. They argued that I misinterpreted their estimates by comparing Kaiser's estimate for all ages to their estimate for 27-year-olds. But they're the ones who made the mistake. Apparently, they misread the Kaiser estimate I cited, which referred to 18-to-34-year-olds, not all age groups. I chose this estimate specifically because it was comparable to theirs.

Then, they cited other studies that used the same faulty methodology that they used, and they claimed that I "ignored" those studies -- when in fact I explained exactly why those kinds of studies were inaccurate.

Finally, they suggested that I was conflating premiums before subsidies with the cost after subsidies, overlooking the price paid by taxpayers. At this point, I was wondering whether they even read my original article, where I made a clear distinction between the two. The evidence suggested, I wrote, that the average premium increase before subsidies was small -- maybe zero. And even if it did increase, that increase was due to people buying more generous plans because now they could afford them. And the point of the subsidies was to make health insurance costs go down for the people who needed it the most -- which is exactly what happened.

Whew. You can see what I meant when I said it was controversial.

The good news is, now we have a second year of data to settle the debate, and this data is better because we can compare the same level of plans with the same amount of coverage on the same exchanges, apples-to-apples, as opposed to the pre-Obamacare plans, which were all over the map. Literally.

The nonpartisan Kaiser Family Foundation has examined the "benchmark" silver plans in major cities in all 50 states, and they've found that the monthly premiums have increased 2 percent, on average, since last year. That is slower than health insurance premiums have grown in any year since we've started recording the data. Only a couple years ago, health insurance costs were growing 5 percent per year. During the Bush administration, they were growing more than 10 percent per year. Two percent is unheard of.

And that's only the average. In nearly half of those cities, premiums are falling on the exchanges. That's unprecedented. Health insurance premiums almost never fall. And when you compare premiums after subsidies, 90 percent of cities are paying less than they did last year!

Now, maybe you still don't like Obamacare. Maybe you'd prefer a simpler, cheaper system. (Who wouldn't?) But there is one thing you simply cannot deny: Over the past year, health insurance has become more affordable for the non-group market, and the result will be better health care for millions of Americans who need it and wouldn't have it if Obamacare didn't exist.