A new poll conducted for POLITICO and the Harvard T.H. Chan School of Public Health finds that 54 percent of likely voters think Obamacare is working poorly. Ninety-four percent of self-identified Donald Trump voters hold that view, while 79 percent of Hillary Clinton supporters believe the law is working well.
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President Obama promised that the Affordable Care Act would increase competition and choice in insurance markets. In a 2009 speech to a joint session of Congress, for example, the president said, “Individuals and small businesses will be able to shop for health insurance at competitive prices. Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers.” This claim, along with many othersmade by ACA supporters, have proven to be wrong. In fact, Americans have far fewer choices for individual market coverage today than they had before the ACA took effect and there is a rapidly declining number of insurers now offering coverage in the ACA exchanges.
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The Obama administration hasn’t done enough to ensure that the right people get Obamacare subsidies, according to a new report from congressional Republicans.
The report details earlier investigations into Obamacare’s verification process for income eligibility, which screens whether a person is eligible for tax credits. It also criticizes the administration for relaxing standards for income eligibility.
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The architects of the Affordable Care Act thought they had a blunt instrument to force people—even young and healthy ones—to buy insurance through the law’s online marketplaces: a tax penalty for those who remain uninsured. The full weight of the penalty will not be felt until April, when those who have avoided buying insurance will face penalties of around $700 a person or more. But for the young and healthy who are badly needed to make the exchanges work, it is sometimes cheaper to pay the Internal Revenue Service than an insurance company charging large premiums, with huge deductibles. The IRS says that 8.1 million returns included penalty payments for people who went without insurance in 2014, the first year in which most people were required to have coverage.
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Skyrocketing premium increases on the Obamacare exchanges for 2017 were announced Monday afternoon by the Department of Health and Human Services, averaging nearly 25% across 38 federal exchange states. More than 70% of consumers in states using the federal exchange will be able to find a premium that is less than $75 a month once financial assistance is factored in, according to the HHS report. That’s because 85% of enrollees in the Obamacare exchanges receive subsidies to offset the cost of the premium increases. But someone has to make up the difference, and it is, of course, middle-income taxpayers. Douglas Holtz-Eakin, former director of the Congressional Budget Office and current president of the American Action Forum, estimates that taxpayers will fork over $32 billion in ACA subsidies this year and up to $50 billion next year.
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Those on both the left and the right overestimated the effect Obamacare would have on the larger health care system. The footprint of Obamacare has been smaller than expected. It hasn’t shaken up the employer system all that much, and it hasn’t changed the underlying health system as champions and critics thought it would. It hasn’t reduced the uninsured as much as expected and (therefore) hasn’t cost as much as expected overall even though per capita costs are higher than projected. The exchanges have drawn far too few healthy people to be stable and the rules that govern them have had too little of an effect on the dynamics of our larger health economy to be fundamentally disruptive.
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The Trump campaign has doubled down on Health Savings Accounts, the health-insurance-as-401(k) product the Affordable Care Act was supposed to extinguish but which was specifically saved by President Obama in order to provide Americans with a health insurance option they could actually afford. The ACA specifically delegates the important job of defining what is and what isn’t health insurance to the Department of Health and Human Services. A President Trump could use that authority to greatly expand the role of HSAs in the exchanges and in entitlements, limited only by changes in budget such revision might entail.
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Two weeks before Election Day, Obamacare is back big time.
Republicans capitalized on the Affordable Care Act’s unpopularity in 2010 and 2014 to retake both houses of Congress. But until now, the issue hadn’t ignited in a presidential campaign season dominated by the outsize personality of the GOP presidential nominee who has focused on trade, terrorism and ad hominem attacks.
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Next year’s enormous premium increases are merely the latest expression of Obamacare’s underlying problems, and the dysfunction is undermining the health security of Americans who lack employer coverage. A wave of major insurers have quit the exchanges, and those that are left have raised deductibles and copays and restricted choices of doctors and hospitals. The only way to break the Obamacare status quo is if the public returns a Republican Congress to Washington. If Republicans can hold the Senate amid a Clinton victory, they’d be in a better position to negotiate solutions along the lines of the House GOP “Better Way” blueprint that would start to repair the individual market and create incentives for more choice and competition.
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In 2008, the year that Barack Obama was elected as president, the combined annual profits of America’s ten largest health insurance companies were $8 billion. Under Obamacare, the ten largest health insurers’ annual profits have risen to $15 billion. This is another fine example of the natural alliance between Big Government and Big Business, which flourishes at the expense of Main Street Americans.
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