As Democratic presidential candidates debate their healthcare plans, one of those plans has already been tried – and failed. I’m speaking of the Biden plan, better known as ObamaCare.
Biden has resisted the progressives move to Medicare for All, doubling down instead on Obama’s plan, The Affordable Care Act. Like most legislative names, this one cannot live up to its billing. It has become increasingly unaffordable for everyone except those who get generous government subsidies.
Former Vice-President Biden plans to “protect and build on the Affordable Care Act.” Brian Blasé, writing in The Wall Street Journal, says ObamaCare has failed in its primary goal – to create a better market for individual health insurance. The ObamaCare exchanges are performing much worse than expected when they were launched in 2014. Furthermore, this has nothing to do with the Trump administration as Democrats claim.
ObamaCare has failed because of its perverse incentives and haphazard construction. It mandated a long list of expensive coverage benefits while insisting that every policy contain each of these benefits, regardless of need. Therefore, seniors are paying for pediatric dental coverage, men are paying for mammograms, and women are paying for prostate exams. Understandably, under these perverse conditions, premiums have soared.
To make matters worse, young healthy people were asked to pay higher premiums than older sicker people. The Individual Mandate was supposed to force conformance with this plan but they chose to pay the penalty (“tax”) instead. This raised rates for those purchasing coverage because there were not enough healthy people in the case mix. The Trump administration has simply eliminated this nonsense by removing the penalty.
Blase says the congressional Budget Office estimated in 2014 that there would be 25 million enrollees covered in the exchanges in 2019. But the actual figure is about 10 million. Those who don’t qualify for the government subsidies has chosen to go without coverage at all. Democrats try to blame the Trump administration for this decline in the number of covered Americans, but this only represents what people choose when they have the freedom to decline these expensive, little used policies.
The result is the exchanges have become a high-risk pool for lower-income people with a limited selection of plans. The left has accused the Trump administration of sabotage of the system but in reality they have stopped the bleeding. Blase explains:
“First, a market-stability rule limited enrollees’ ability to game ObamaCare’s rules by waiting until they need care to buy coverage. Second, the administration approved state programs to subsidize high-cost patients without spending additional federal money. States implementing these programs have seen premiums drop by more than 10%.”
“The Trump administration also took action to improve options for those left behind. It reversed a late-2016 Obama administration regulation that restricted the ability of families to obtain affordable short-term plans that don’t comply with all the ObamaCare mandates. Another Trump rule, now under court review, expanded businesses’ ability to form association health plans. In total, these expanded options, along with the elimination of the individual mandate penalty, provide Americans an annual net economic benefit of $45 billion per year.”
Despite all these adjustments to the Affordable Care Act, it remains a failed system that gets worse with every passing year. The decline in covered lives necessitates rising premiums just as the plans are becoming even less attractive. This downward “death spiral” promises higher premiums, less generous benefits, and higher deductibles unless the system is overhauled soon. The Obama- Biden healthcare plan is a failure and no amount of first aid will ever produce a healthy system. The Biden plan is dead on arrival.