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The Daily Signal
Thanks to
Obamacare, Health Costs Soared This Year
Robert Moffit
October 13, 2014
On November 15, open enrollment in the Obamacare exchanges begins
again. Before the second act of our national healthcare drama
commences, let’s review what we’ve learned in Act I.
For starters, everyone now knows that federal officials are challenged
when it comes to setting up a website. But they’ve demonstrated the
ability to dole out a huge amount of taxpayers’ money for millions of
people signing up for Medicaid, a welfare program. And they’ve proved
they can send hundreds of millions of federal taxpayers’ dollars to
their bureaucratic counterparts in states, like Maryland and Oregon,
that can’t manage their own exchanges. But there are many other lessons
to be gleaned from Year One of Obamacare. Here are three of the most
important ones.
1. Health costs jumped—big time. Huge increases in deductibles in
policies sold through the exchanges were a big story in Florida,
Illinois and elsewhere. While the average annual deductible for
employer-based coverage was a little over $1,000, the exchange
deductibles nationwide normally topped $2,000.
Notwithstanding President Obama’s specific promise to lower the typical
family premium cost by $2,500 annually, premium costs actually
increased. D2014 data for the “individual market” shows that the
average annual premiums for single and family coverage rose in the
overwhelming majority of state and federal health-insurance exchanges
all around the country. In eleven states, premiums for
twenty-seven-year-olds have more than doubled since 2013; in thirteen
states, premiums for fifty-year-olds have increased more than 50
percent. For the “group market,” the Office of the Actuary at the
Centers for Medicare and Medicaid Services (CMS) estimated on February
21, 2014, that 65 percent of small firms would experience premium-rate
increases, while only 35 percent were expected to have reductions. In
terms of people affected, CMS estimated 11 million Americans employed
by these firms would experience premium-rate increases, while about 6
million would see reductions. So much for “bending the cost curve down.”
2. The law reduced competition in most health-insurance markets. A
limited analysis by the Kaiser Family Foundation found that in 2014,
large states like California and New York were more competitive, but
Connecticut and Washington were less competitive. The Heritage
Foundation conducted a national analysis and found that between 2013
and 2014, the number of insurers offering coverage on the individual
markets in all fifty states declined nationwide by 29 percent. On a
county level, 52 percent of U.S. counties had just one or two
health-insurance carriers. In 2014, at least, the law did not deliver
on its promise of more personal choice and broader competition.
3. We still don’t know for sure how many people are actually insured.
Following the disastrous October 2013 Obamacare “roll-out,” the
Congressional Budget Office (CBO) estimated that about 6 million
(rather than 7 million) would enroll in the exchanges. Last April,
administration officials reported that they reached and surpassed their
goal, enrolling over 8 million people in the health-insurance
exchanges. They then declared the health-care debate, like the Iraq
War, “over.”
That declaration appears to be premature. The administration now
concedes that there are 700,000 fewer persons in the exchanges. Of
course, we can expect some attrition. But exchange enrollment is not
the same as insurance coverage. CBO said it best: “The number of people
who will have coverage through the exchanges in 2014 will not be known
precisely until after the year has ended.” Exactly.
Beyond the seemingly endless surveys, estimates and guesstimates, we do
have some raw data. Between October 1, 2013, and March 31, 2014, there
was a net increase in individual coverage of 2,236,942, but there was a
net decrease in group (employment-based) enrollment: it fell by
1,716,540. Enrollment in Medicaid and the Childrens’ Health Insurance
Program (CHIP) increased by about 5 million over that same period.
We’ll know more later, as CBO said, especially how many Americans are
losing their employment-based coverage.
Who enrolls is also crucial. In 2013, Obama administration officials
said that their goal was for young adults between the ages of eighteen
and thirty-four to account for 40 percent of exchange enrollments. On
April 17, 2014, the White House announced that only 28 percent of those
enrolled through the federally administered exchanges were between
eighteen and thirty-four years of age—the crucial age bracket for a
robust and stable insurance pool—but that 35 percent of the total
enrollees were under the age of thirty-five. That made it sound as
though the program was fairly close to reaching its target. But thanks
to excellent reporting by Politico, we learned that the bigger number
included children enrolled in the exchanges. Nice try.
Maybe 2015 will bring better news for Obamacare. But don’t bet on it.
Read this and other articles with links at The Daily Signal
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