Health Insurance Security


Perception is reality. That’s the message voters have declared in the recent mid-term elections.

Now that Democrats have regained control of the House of Representatives, the pundits are all analyzing why. There’s no doubt that healthcare was a big issue, perhaps the most determining issue in the minds of voters. This is surprising since Democrats created the current healthcare mess we call ObamaCare and Republicans are trying to fix it.

Robert Laszewski, insurance industry analyst, writes in his blog that Democrats think the mid-term elections vindicate their precious ObamaCare, but Laszewski says the real issue is healthcare insurance security. He says people are most concerned with the ability to have healthcare insurance under any circumstances.

The perception of the voters is that Republicans want to take away that security by eliminating protections for pre-existing conditions, depriving people of Medicaid, and taking away financial assistance programs. Democrats were successful in selling this false narrative and Republicans failed to counter with the truth.

The truth is that ObamaCare is failing in the individual health insurance market:

  • In March 2016 there were 20.2 million people covered in the individual health insurance market (according to Mark Farrah and Associates)
  • In March 2017 that count was down to 17.7 million
  • In March 2018 the count was 15.7 million – a 22% drop in two years.


ObamaCare hits the middle class the hardest – those who don’t qualify for subsidies:

  • In March 2016 there were 7,520,939 people covered in the off-exchange individual health insurance market where subsidies are not available.
  • In March 201l7 there were 5,361,451 covered
  • In March 2018 there were 4,004,522 covered


Why has the ObamaCare individual market melted-down in these last two years?

The premiums and deductibles are sky-high for all but the lowest income patients.

For example, in Northern Virginia, the cheapest 2019 ObamaCare Silver plan for a family of four making a subsidy eligible $65,000 a year costs $4,514. That plan has a $6,500 deductible – which means the family must spend $11,014 on eligible health care costs before collecting other than nominal first dollar benefits.

The same family, but earning too much to be eligible for the subsidies (as 40% of families do) would have to spend $19,484 in premiums and $6,500 for the deductible – a total of $25,984 in eligible costs before they would collect any meaningful benefit.

This explains why the number of people with healthcare insurance is declining. Many have decided healthcare insurance is too expensive and not worth the cost. They are electing to go without coverage until they are sick – and then signing up for coverage because they can still qualify despite their pre-existing condition. This “gaming of the system” makes sense for them – but raises the costs for everyone else.

The reality is that protections for pre-existing conditions are now accepted by both parties as a necessary requirement for any healthcare system. The only real debate is how to prevent this “gaming of the system” that drives up costs.

There remains debate over the value of Medicaid – even most politicians don’t understand the evils of this system that denies people access to healthcare and lowers their healthcare outcomes. But even red states like Nebraska, Utah, and Idaho recently approved ballot measures to expand Medicaid. They will regret this decision as the expansion leads to higher budget pressure to reduce money for other important needs like schools, roads, and law enforcement – without improving healthcare.

The perception of the public right now is that Democrats offer a better answer for healthcare – but the reality is they have no real answers. They are defending a failing system with scare tactics about any changes. Republicans must do a better job of selling real reform ideas that will still protect healthcare insurance security.

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