Last of the Broken Promises

There have been many broken promises with the implementation of the Affordable Care Act (ObamaCare). My soon-to-be-published book, The ObamaCare Train Wreck, chronicles at least eight of these. President Obama has rightly received much criticism for these distortions of the truth about his signature healthcare law. The most famous of these broken promises was “If you like your plan you can keep your plan.” This earned the president the dubious distinction of “The Lie of the Year” from PolitiFact.com.

While campaigning for the presidency, candidate Obama made the following statement: “I will sign a universal health care bill into law by the end of my first term as president that will cover every American” (June 23, 2007). This was one promise most people believed Obama had kept. PolitiFact.com scored it that way. He did, in fact, sign into law The Affordable Care Act in 2010 during his first term in office.

There were actually four goals established by the architects of ObamaCare. They promised to reduce the number of uninsured Americans, lower the costs of healthcare, maintain the quality of healthcare, and solve other unaddressed problems such as long-term care insurance. (CLASS Act)

Lowering the cost of healthcare is impossible when you force insurance carriers to cover more people with more free preventive care and disallow exclusion of anyone for pre-existing medical conditions. So too, maintaining quality when the number of providers is declining as demand increases is a formula for failure. The last of these goals has since been rejected by the White House as too expensive. The Community Living Assistance Services and Supports Act (CLASS) was eliminated by Congress on January 2, 2013. But the first goal, decreasing the number of uninsured Americans, has always seemed to be an achievable goal.

But even this modest goal is starting to crumble as more and more research reveals the cracks in this government takeover of healthcare. This year the Congressional Budget Office (CBO) revised its earlier projections and now expects by 2024 there will still be about 31 million uninsured Americans. How does this compare to before ObamaCare?

The Uninsured Before ObamaCare

In 2010, before ObamaCare, there were about 50 million people or 16% of the population in America without health insurance. Of these about 13 million were illegal aliens that never qualified for ObamaCare insurance. So about 37 million were uninsured and eligible for ObamaCare. The best estimates of the architects of ObamaCare predicted the new law would cover about 95 % of the population with the only remaining uninsured being illegal aliens, those who refused to purchase insurance, or those eligible for Medicaid who failed to enroll; a number estimated at about 17 million or 5 % of the population.

Therefore, the CBO predictions lower the expectations to 31 million or about 10% of the population. By those estimates, the new health care law only improves coverage of the uninsured by about 19 million or about 6% of the population.

But now come estimates that predict the number of uninsured Americans who are not illegal aliens will be 40 million by 2024. That’s about 10% more than the 37 million who were uninsured when the law was passed in 2010. In an article published recently in The Wall Street Journal, authors Stephen T. Parente and Bianca Frogner explain their reasoning. Parente is associate dean of the Carlson School of Management and director of the Medical Industry Leadership Institute at the University of Minnesota and Frogner is a professor at George Washington University.

They see that rising premium costs and out-of-pocket expenses will force low to middle income consumers out of the private insurance market. They estimate average premiums on the individual exchange health plan (Silver) will increase by $1375 by 2019 while the average family premium for the same plan will increase by $2,198 – outpacing the average increases from 2008 to 2013. The steepest increase in these prices will be seen in 2017 for three reasons:

  • All plans, including those currently exempt for hardship and old plans extended for various reasons – must comply with the “essential health benefits” rules enacted by the HHS Secretary. As many as 60% of plans sold in 2013 were non-compliant.
  • The “reinsurance program” will expire in 2017, meaning health insurers will no longer be reimbursed by the government for their uncovered expenses.
  • The “risk corridors” program will also expire in 2017. (See The Insurance Bailout Has Begun earlier post.) The insurance companies will look now to consumers, rather than the government, to pick up the tab for these high cost policies.

Don’t expect government subsidies to keep up with these sharply rising premium expenses.

Consumers will be forced into one of several poor options. Purchase lower cost high-deductible plans and hope they don’t have to use them; sign up for Medicaid if they’re eligible, or go without insurance at all. The loss of these individuals from the private insurance market will drive up premiums even higher for those who continue to purchase their insurance.

The Impact of ObamaCare

Parente and Frogner predict over 5 million will lose their employer-provided insurance as employers favor letting employees get their insurance on the exchanges. The CBO has actually estimated this number at 7 million by 2020. They believe Medicaid enrollment will increase by 2-3% annually through 2024. But many will not be eligible for the program, especially since half of the states decided not to expand Medicaid under ObamaCare because of fears of rising state expenses.

The result of these changes will be many uninsured Americans who will accept the government tax for failure to purchase insurance; $695 or 2.5% of income, whichever is greater, after 2016. By their calculations, this will leave 40 million Americans uninsured by 2024, not counting illegal aliens.

If their calculations are correct, this means after 10 years of ObamaCare there will be about 10 % more Americans uninsured than before the law was enacted! After trillions of your tax dollars have been spent by the government to provide insurance for those currently uninsured, there will actually be more Americans uninsured. This exposes ObamaCare for what it really is: a government takeover of healthcare for the purposes of control and redistribution of wealth.

Parente concludes, “So perishes the Affordable Care Act’s promise to deliver universal health care – its fatal conceit. The autopsy will show that it died from a lack of affordability, leaving behind millions of Americans who were sold a bill of goods. One thing is painfully clear: that isn’t what the doctor ordered.”

 

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