I still can’t quite wrap my head around the fact that Obama thought it was a good idea, in midst of 9.6% unemployment, and on the day after the census bureau announces that 1 in 7 Americans are living in poverty, to show up at the gated Connecticut mansion of a guy named Rich Richman and tell a privileged few at a private $30,000 a plate fundraiser that people who see their glass “half empty” are pessimists and that the health care bill represents “the most productive, progressive legislative session in at least a generation.”

The people in Connecticut who couldn’t afford $30,000 to attend an event that raised $1 million for the DNC might not see it that way:

Sept. 19–Connecticut regulators in recent days approved increases of more than 20 percent on some health plans starting Oct. 1, including a series of rates requested by Anthem Blue Cross & Blue Shield, by far the largest health insurer in the state….The higher prices, however, are a glimpse of what may be in store later this year when insurers propose new rates for 2011.

The major difference between rising prices this year and years past is the cost of new benefits added to health plans starting Thursday as mandated by the sweeping reform approved by Congress in March.

Insurers say the cost of new benefits will increase prices more than 20 percent for certain plans.

When Obama was selling his health care plan to the public on June 22, 2010, he said that the changes mandated by the health care bill this year meant that people would be seeing benefits immediately:

[S]tarting in September, some of the worst abuses will be banned forever. No more discriminating against children with preexisting conditions. No more retroactively dropping somebody’s policy when they get sick if they made an unintentional mistake on an application. No more lifetime limits or restrictive annual limits on coverage. Those days are over.

He also said “we’ve got to make sure that this new law is not being used as an excuse to simply drive up costs.”

But that’s exactly what’s happening in Connecticut.

Anthem Blue Cross Blue Shield, the largest insurer in Connecticut, has already requested and received increases on individual market plans to cover the cost of new benefits mandated by the health care bill that start this year:

  • 4.8% increase related to the mandate about pre-existing conditions for children
  • up to 8.5% increases for mandated preventive care with no deductibles
Anthem has also said that removing annual spending caps would cause the cost of individual market plans to “rise by as much as 22.9 percent.”
Obama, the Urban Institute and others were relying on estimates made by the Department of Labor that were used to calculate the impact of the health care bill’s 2010 mandates:
  • Removal of annual spending caps: “The Departments estimate that the transfer would be three-quarters of a percent or less for lifetime limits and one-tenth of a percent or less for annual limits, under a situation of pure community rating where all the costs get spread across the insured population.”
  • Mandates for preventive care: “There will likely be negligible transfers due to this provision given no changes in coverage or cost-sharing.”
  • Coverage for children with preexisting conditions: “Even in States with community rating, the cost and transfer effects will be relatively small, at most a few tenths of a percent over the next few years.”

But Connecticut isn’t the only place this is happening.  As the Wall Street Journal reported last week, the health care bill is being used as an excuse by insurance companies to jack up rates all across the country.

It’s clear that the rate increases are far in excess of what these reform provisions actually cost.  And there is nothing in the health care bill that stops them from doing so.  In a free market, other insurance companies would be able to enter the market and provide a better product at a lower price.  But health insurance companies are exempt from anti-trust regulation, and can legally operate as monopolies and engage in monopolistic practices.  The health care bill did nothing to stop that.

That’s why the people Obama now mocks wanted a public option.  If the government is going to assign its right to collect taxes to private companies (which is what they did when they passed the mandate), and allow the IRS to be used as an enforcement mechanism, people wanted to feel like there was an alternative.  Faced with looming rate increases far in excess of anything they were told when the bill was being sold to them, in the wake of rising economic insecurity and high unemployment, people are justifiably anxious.

Single mother Susie Madrack explains why people like her found Obama’s comments upsetting:

[T]hose of us left living on a wing and prayer thanks to your “half full,” half-assed economic policies just don’t have a sense of humor about our continuing plight. I know it’s been a long time since your mom got food stamps, but you might want to give that empathy thing some thought.”

The usual suspects are cheering Obama’s comments, including  the American Prospect, who call them “justified mockery.”   But those who enjoy a ”subsidized existence vomiting up flabby consensus received opinions within the federal zone” (h/t Who is IOZ) generally aren’t the working class single moms who have to worry about things like rising health insurance premiums.  So it’s no surprise they wouldn’t understand why someone might feel their glass is “half empty” these days.

Update: The health care bill is also being used by Anthem, Aetna and other insurance companies to raise rates in Colorado (h/t dakine)