by Mike Casey and John Canham-Clyne
Former Obama administration officials and pundits of all ideological stripes insist that the rate at which employer-sponsored premiums have grown has slowed dramatically since passage of the ACA. It simply isn’t true.
One of the critical sources for this false fact is the Kaiser Family Foundation Health Research and Education Trust annual survey of employers. In the fall of 2015 and again in 2016, Obama White House Counsel of Economic Advisors Chair Jason Furman put out press releases linking to the survey with headlines like “New Data Show Slow Healthcare Cost Growth Is Continuing.” The White House line was picked up by pundits all over the internet.
The KFF/HRET data did show that the pace at which the nominal dollar cost of employer-sponsored premiums was growing had slowed dramatically. (For inflation, KFF/HRET uses the April not–seasonally adjusted CPI-U for all cities, available here.) But a freshman economics student knows that such information is meaningless unless adjusted for inflation.
The immediate post-ACA world includes the fallout from the economic crash, followed by the historic 2014 collapse of oil prices—eading to very low, sometimes negative inflation. A look at the actual KFF/HRET data tables reveals that from 2010 to 2016, employer-sponsored health insurance premiums grew by 326 percent of the rate of general inflation (CPI-U). For the six years prior to the ACA, premiums grew at 241 percent.
Mike Casey is chair of the Healthcare Initiatives Task Force of UNITE HERE, a union of 270,000 North American hospitality workers. John Canham-Clyne is deputy director of research for UNITE HERE.