For weeks, rumors have been flying that WikiLeaks would deliver an “October surprise” for Hillary Clinton’s campaign, a bombshell revelation that she would struggle to recover from in the short weeks remaining until the election. (So far, it’s a dud — surprise!)
But Clinton should be worried about a “November surprise” — the wave of policy cancellations and rate hikes that will attend the debut of Obamacare’s fourth open-enrollment period, on Nov. 1. Just a week before Election Day.
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If policy makers want to instigate more competition in the ACA, they can start by broadening “credibility adjustments” to make it easier for new plans to get started. The exemptions should cover all new carriers that enter the exchanges. They should be deeper and apply for an extended period over which a new carrier faces high startup costs.
A far better alternative would be to scrap the caps on health plan operating margins altogether, and make it easier for new plans to channel revenue into startup costs and investors to turn profits off these investments. The law already provides some flexibility toward these ends. It states that the HHS Secretary can adjust the individual market cap if “the Secretary determines that the application of the 80% may destabilize the individual market in such State.” So long as consumers have transparency (and reliable metrics) on the value of the benefits that different plans offer, the exchanges would benefit from giving new health plans far more flexibility on how they allocate their capital.
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A look at transcripts of Clinton stump speeches since she kicked off the general election campaign on Labor Day finds the Democratic candidate almost never talks about Obamacare. She doesn’t promise to expand it. She doesn’t promise to protect it. She doesn’t extol its benefits. She just doesn’t mention it.
There’s no doubt Obamacare is in trouble. Enrollment in the exchanges has fallen far short of projections. The purchasers of policies have turned out to be older, and in need of more care, than expected. Major insurers are pulling out of the exchanges altogether. Premiums are going up. Deductibles are skyrocketing, meaning many are left to pay most of their healthcare costs themselves.
Obamacare’s fourth open enrollment period will begin November 1. For the Internal Revenue Service, it will be open season on uninsured taxpayers. In an effort to maximize enrollment, the IRS is mining the personal tax information of people who have chosen not to buy Obamacare policies or claimed an exemption. CMS proclaims Obamacare policies are “a product consumers want and need” and plans an outreach campaign. The agency can’t understand why millions of people—many of them young and healthy—still don’t realize what they want and need it.
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Several RAND Corporation health economists have offered very rough estimates of the coverage and cost effects of the hazy health policy proposals by the two major presidential candidates, Hillary Clinton and Donald Trump. In choosing to fill Trump’s policy vacuum with their own void of limited health policy modeling, the RAND researchers conclude that Trump’s proposals would increase the number of uninsured individuals within a range of 16 to 25 million individuals (relative to current-law ACA arrangements), with disproportionate losses suffered by those with low incomes or in poor health. However, Trump doesn’t spend much more taxpayer money to achieve these results, and his plans in health policy would increase the federal deficit by somewhere between $0.5 billion to $41 billion.
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ObamaCare is plainly unaffordable for many young Americans. We’re at the start of our careers—and the bottom of the income ladder—so paying so much for something we likely won’t use makes little sense. The IRS penalty of $695 or 2.5% of our income is often cheap by comparison. We may be young, but we can do the math.
Young Americans aren’t looking for “outreach” and “engagement” from President Obama. We’re looking for affordable health-insurance plans—and ObamaCare doesn’t offer them.
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Hillary Clinton surely is hoping health reform remains a side issue the presidential campaign as bleak news of its failures have propelled Obamacare back into the spotlight. Clinton owns Obamacare after telling Iowa voters: “I will defend the Affordable Care Act, but as president I want to go further.” She actually wants to double down, even after seeing public support for the health law tumble. She wants to create another big government “public option” that would have unlimited calls on taxpayer dollars and government force and would quickly drive remaining private insurers out of the market, leaving people with only the “choice” of a government-run health plan. We can and must do better than Obamacare, and the voters know it.
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The Chicago Tribune editorial board lays out a succinct explanation of why the Affordable Care Act is failing: The law hasn’t tamed U.S. medical costs, the penalties for going uncovered are low compared to skyrocketing premiums, the law has straitjacketed insurers into providing soup-to-nuts policies, and too many carriers simply can’t cover expenses, let alone turn a profit, in such a rigidly controlled system. Is Obamacare plunging in a so-called insurance death spiral? Is the market so unstable that plans are doomed to get more and more expensive, driving more Americans and more insurers out of the market until Obamacare thuds to the pavement? The next president and Congress need to reckon with Obamacare’s failures or wait for the thud.
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Along with “stakeholders” (campaign donors), “investments” (government spending) and “obstruction” (Congress), one of our favorite political euphemisms is “improper payments.” That’s how Washington airbrushes away the taxpayer money that flows each year to someone who is not eligible, or to the right beneficiary in the wrong amount, or that disappears to fraud or federal accounting ineptitude. Now thanks to ObamaCare, improper payments are soaring.
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Aetna’s pullback from the Affordable Care Act’s (ACA) Insurance Exchanges is another bad omen in a growing list. Throughout the controversial history of Obamacare, Aetna has been a stalwart continuing to voice confidence in the future of the program.
Until we are willing to have a conversation about how to fundamentally change a failing program Obamacare is just going to continue to deteriorate. That won’t happen until supporters end their denial and Republicans admit they can’t turn back history.
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