Many people signing up for 2016 health policies under the Affordable Care Act face higher premiums, fewer doctors and skimpier coverage, which threatens the appeal of the program for the healthy customers it needs.
Insurers have raised premiums steeply for the most popular plans at the same time they have boosted out-of-pocket costs such as deductibles, copays and coinsurance in many of their offerings. The companies attribute the moves in part to the high cost of some customers they are gaining under the law, which doesn’t allow them to bar clients with existing health conditions.
No wonder enrollment is about half (10 million) of what it was expected to be. This comes as no surprise to critics of Obamacare who understood that the Affordable Care Act did nothing to curb the prices of healthcare insurance, and instead subsidizes overuse of healthcare under the benefit-rich policies required by the law:
These dual realities threaten to undercut the law’s popularity with the customers it relies on the most: relatively healthy people. Their participation is vital to offset the costs of sicker people who can buy coverage at equal prices for the first time under the law; if the healthier ones pull out, that would put additional upward pressure on premium prices.
Premiums for individual plans offered by the dominant local insurers are rising almost everywhere for 2016, typically by double-digit percentage increases, according to a Wall Street Journal analysis of plan data in 34 states where the HealthCare.gov site sells insurance.
The problem is getting worse with time. As the Washington Examiner reports, “UnitedHealth Group, the largest insurance company in the U.S., on Thursday slashed its earnings outlook, citing new problems related to Obamacare, and told investors it may exit the program’s exchanges. . . . If UnitedHealth and other insurers decide to exit, remaining insurers will be forced to take on even more high-risk enrollees, prompting them to either raise rates further or exit themselves. That in turn would deprive individuals of choices and remove competition, a key purpose of the exchanges.”
When Democrats claim Obamacare is “working,” they may be greeted by much eye-rolling and head shaking. Even the expansion of coverage is somewhat illusionary insofar is a substantial portion of the newly insured are Medicaid enrollees in states that expanded coverage. Scott Atlas, M.D. of the Hoover Institution finds that in the first three quarters of 2014, 89 percent of the newly insured got coverage through Medicaid. That’s about the worst possible way to offer new insurance given the high costs, fraud, and shortage of doctors accepting new Medicaid patients. It is worth scrapping Obamacare if only to reverse the perverse system that shovels more people into a system without the same “access to doctors, specialists, treatments, and medical technology as the general population.”
Obamacare is expanding a two-tiered system of healthcare, in essence promoting inequality, without the anticipated positive consequences such as the promise of reducing emergency care visits. (Republicans offering to fund healthcare spending accounts for the poor so they can buy whatever private healthcare insurance they wish would provide them with the same dignity and access to care all other privately insured Americans enjoy.)
If Republicans had created a system that promoted consolidation of healthcare insurers, hospitals and providers, socked middle class Americans with higher costs, made doctors scarcer and entrenched an inferior healthcare system for the poor, liberals would be up in arms. Instead they defend the status quo.
Republicans have an opportunity in 2016 to rescue Americans from higher costs, restricted access to providers and inferior care. Many Republicans are suggesting a system removing Obamacare mandates to allow purchase of cheaper plans; equalizing tax treatment of individually purchased and employer-provided insurance; expanding HSA’s; and other measures to restore market competition and promote cost reduction. Republicans, if they lay out their plans, will have the opportunity to debunk Democrats’ scare-mongers. Republicans will not be threatening to take away Obamacare; they’ll be offering cheaper, more accessible, less unequal healthcare coverage. Let the Democrats run against that.