The impact of ObamaCare on doctors and patients, companies inside and outside the health sector, and American workers and taxpayers

Joshua Smith, a Rockland County insurance broker, was deluged with questions from clients after regulators said they were shutting down Health Republic Insurance of New York, which was known for having some of the lowest rates in the state.

“It’s been a week of craziness,” said Mr. Smith, who owns Vanguard Benefit Solutions LLC, which enrolled about 75 small businesses in Health Republic’s plans. “Lots of emails, lots of calls, and everybody is nervous about what is going to happen.”

In apparent recognition of the distinct unpopularity of the Affordable Care Act’s Cadillac tax—an excise tax on high-value, employer-provided health benefits—more than 100 economists have signed a letter defending it. As the Washington Post headline about the letter read: “101 Economists Just Signed a Love Letter to the Obamacare Provision Everyone Else Hates.”

Risk corridor data released on October 1 by the administration shows that insurers lost a lot of money on Affordable Care Act (ACA) plans in 2014. The ACA established a three-year risk corridor program to transfer funds from insurers with lower-than-expected medical claims on ACA plans, i.e., profitable insurers, to insurers with higher-than-expected claims, i.e., insurers with losses. Despite administration claims that incoming payments from profitable insurers would cover losses from unprofitable ones, the risk corridor program shortfall exceeded $2.5 billion in 2014. Insurers with lower-than-anticipated claims owed about $360 million, and insurers with higher-than-anticipated claims requested about $2.9 billion from the program.

One of the consumer complaints levied against Affordable Care Act (Obamacare) health plans is that their provider networks are often narrow,1 creating both a high ratio of patients to doctors2 and increasing the risk for out-of-network care.3 With respect to out-of-network care, when enrollees go out-of-network for healthcare, many Obamacare plans will not cover the costs except in the case of a medical emergency or if a prior authorization from the plan had been formally submitted and then approved by the health plan. Moreover, unlike in-network healthcare, out-of-network medical care does not have its annual costs capped by the Affordable Care Act to prevent catastrophic medical expenses.

A recent poll by Rasmussen revealed that just 37 percent of likely U.S. voters believe the government should mandate that every American have health insurance, down four percentage points from its previous poll and the lowest level of support since December 2013. In addition 52 percent of Americans now oppose government-mandated health insurance, the highest it has been since that December 2013 poll.

Late last month, Hillary Clinton began releasing the details for her vision for health reform.

That vision is little more than Obamacare on steroids. “I will defend the Affordable Care Act, but as president I want to go further,” the Democratic presidential hopeful said at a recent community forum in Iowa. “I want to strengthen the Affordable Care Act.”

Apparently not. For every person who has obtained insurance in the (Obamacare) exchanges, there are two other eligible people who have not enrolled. We now have a good idea why that is.

When people who were previously insured in the individual market obtain insurance in the exchanges, on the average they are worse off. And here is a surprise. When the previously uninsured obtain insurance in the exchanges, they are also worse off.

The Patient Protection and Affordable Care Act is the law of the land and will likely continue to be for some time, despite opponents’ best efforts to get it thrown out in court.

But what the law will look like a few years down the line is anybody’s guess. In fact, the landmark legislation has already been changed significantly since it was originally enacted more than five years ago.

Mercy will be the 58th rural hospital to close in the United States since 2010, according to one research program, and many more could soon join the list because of declining reimbursements, growing regulatory burdens and shrinking rural populations that result in an older, sicker pool of patients. The closings have accelerated over the last few years and have hit more midsize hospitals like Mercy, which was licensed for 75 beds, than smaller “critical access” hospitals, which are reimbursed at a higher rate by Medicare.

In 2009 and 2010 President Barack Obama and Health and Human Services Secretary Kathleen Sebelius designed and championed the largest expansion of the welfare state since the New Deal with little more than political force and broken promises. While the American people are forced to accept Obamacare until it can be repealed, the Supreme Court empowered states to accept or reject Obamacare’s Medicaid expansion. So far 20 states have said no.