This week, the Georgia Chamber of Commerce released a new plan to impose more of Obamacare on their state. The Chamber acknowledged that their “guiding principle” in crafting the Medicaid expansion plan was simply to “take advantage of all federal dollars available.” As such, they’re lobbying for policymakers to expand Medicaid to a new welfare class of more than 700,000 able-bodied adults.
Although the “plan” has few details – so far it consists solely of two PowerPoint slides – one thing is certain: it will be a more costly way to expand Obamacare that combines some of the most expensive aspects of other expansion plans from around the country.
The Obama administration has repeatedly inferred that most people are fully subsidized under Obamacareand the big 2017 rate increases therefore don’t matter:
“Headline rate increases do not reflect what consumers actually pay,” Kathryn Martin, HHS’s acting assistant secretary for planning and evaluation, said in a statement. “Even in a scenario where all plans saw double-digit rate increases, the vast majority of consumers would continue to have affordable options.”
To be as precise as they are careful to be, they correctly claim that 85% of those buying on the exchanges are subsidized. But they also never mention that half the people who buy Obamcare individual health insurance–on and off the exchanges–don’t get a subsidy and take the full whack from all of the big rate increases and even higher deductibles. The middle class seems to be invisible to them.
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The best measurement of people who lack health insurance, the National Health Interview Survey published by the Centers for Disease Control and Prevention (CDC), has released early estimates of health insurance for all fifty states and the District of Columbia in the first quarter of 2016. There are three things to note.
First: 70.2 percent of residents, age 18 to through 64, had “private health insurance” (at the time of the interview) in the first quarter of this year, which is which is the same rate as persisted until 2006. Obamacare has not achieved a breakthrough in coverage. It has just restored us to where we were a decade ago. Further, the contribution of Obamacare’s exchanges to this is almost trivial, covering only four million people.
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Average premium increases above 25%, roughly one-third of U.S. counties projected to lack any competition in the Affordable Care Act (ACA) exchanges next year, and enrollment less than half of initial expectations provide strong evidence that the law’s exchange program is failing. Moreover, the failure is occurring despite massive government subsidies, including nearly $15 billion of unlawful payments, for participating insurers. As bad news pours in and with a potentially very rough 2017 open enrollment period ahead, the Obama administration signaled on Friday that it may defy Congress and bail out insurers through the risk corridor program. Congress should take all steps at its disposal to prevent the administration from doing so.
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The Obama administration proposed this week new rules for its Risk Adjustment program, a critical component of the Affordable Care Act. There are actually some better-late-than-never parts of the proposal. Most notably the new rules will try to compensate for the extra expense insurers incur when people exploit ACA regulatory and enforcement weaknesses to time their insurance purchases to cover only expensive medical emergencies.
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No wonder Politifact awarded President Barack Obama its 2013 “Lie of the Year” award for his Obamacare promise, “If you like your health plan, you can keep it.” My wife has been trying to do exactly that for three years, and has failed every time. But at least she was able to keep her doctor—until now.
I have previously discussed my wife’s struggles to find and keep coverage in the age of Obamacare. It was never a problem before Obama and Democrats decided the government needed to improve access to coverage.
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As health insurers head for the exits, Americans who have been whipsawed by ObamaCare may get whacked again this fall: First, they were thrown off private plans that were declared illegal, then they were forced into the ObamaCare exchanges, and now they could face the prospect of being shut out of coverage through their exchanges entirely for 2017.
The Obama administration has only itself to blame for the ObamaCare failures—first for jamming this bill through Congress despite warnings that the structure of the bill was an economic disaster, and then for exacerbating the breakdown through its regulatory dictates. The ACA was sold on the pretense that we could have a private, competitive market for health insurance, but the law and subsequent regulations put the industry in a straightjacket, with rules at every turn that undermined the industry’s ability to offer attractive, competitive products.
We need to think more broadly about solutions, making sure that people getting coverage now are protected, that those not buying or obtaining coverage have greater incentives to participate, and that the program is financially sustainable.
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People joked for a while about how insurers were pulling out of Obamacare markets so fast we might end up with areas in which there were no insurers at all. It’s no joke anymore: with Aetna’s massive withdrawal yesterday from the Affordable Care Act marketplace, Pinal County, Arizona, the third most populated county in that state, currently has no insurers selling policies on the Exchange. The issue isn’t so much whether people will be subject to the individual mandate tax of up to 2.5% of their income when there are no policies available; an administration that has no difficulty calling a utility shutoff notice a hardship that excuses one from the individual mandate (whether or not the utility was actually shut off) should have no difficulty declaring the non-existence of any insurance to be grounds for an exemption. The issue is that Pinal County, although a bit of an outlier for now, is a harbinger for fundamental problems with the ACA now manifesting themselves with greater clarity across the country. When an insurer covering over 7% of those in the Exchanges and previously hoping to expand instead drops out, we better look at what is going on.
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Canceled health insurance plans, shrinking networks, surging premiums and failed co-ops resulting from President Obama’s 2010 health law are only hiccups compared to Obamacare’s Medicaid expansion.
Unlike other major parts of the law, Medicaid expansion is covering more people than intended. This is terrible news for taxpayers, and it will only get worse with the next economic downturn.
Most of Obamacare’s health insurance coverage gains result from expanding Medicaid–a welfare program previously reserved for the elderly, the disabled, pregnant women and impoverished families with children–to millions of working-age, able-bodied, childless adults. Medicaid expansion is paid for with billions in new federal deficit spending.
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Talk about climate deniers, just how much worse does it need to get before all of the Obamacare defenders are ready to concede this isn’t working.
This has been an awful summer for Obamacare.
Here are just a few of the headlines:
Aetna has been a stalwart of confidence for Obamacare. That confidence took an abrupt and sudden turn this week when it cited unsustainable losses as the reason it was cutting back from 15 states to only four. Aetna reported Obamacare losses of $200 million in just the second quarter and more than $430 million since January of 2014. They expect full-year exchange losses of $320 million in 2016 alone.
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