Obamacare, a veritable fountain of unintended consequences, is a 21st century showcase of government central planning. Let’s be clear. This is what President Barack Obama wanted.
Liberals in Congress meticulously designed the Affordable Care Act’s insurance exchanges as powerful regulatory bodies. They defined the kinds of insurance plans, benefits, and medical treatments and procedures the plans must offer; set all of the insurance rules; determined the permissible premium and deductible levels; and organized the most complex and confusing premium subsidy program imaginable.
So, federal government control was, and is, comprehensive. They planned it all.
Obama’s most high-profile promises, reinforced by “progressive” propaganda, have yielded the following: Americans have less consumer choice, less market competition, exploding insurance premiums, ridiculous deductibles, fewer doctors, a narrowing of provider networks—no, you can’t necessarily “keep” your doctor—and the looming prospect of ever bigger burdens on taxpayers.
Through it all, the Obama administration’s academic and media allies have remained fiercely loyal.
Last year, New York Times columnist Paul Krugman hailed the health care law as “a portrait of policy triumph.” This year, New York Magazine’s Jonathan Chait opined: “The policy rationale for repealing the Affordable Care Act continues to disintegrate, while the political conditions to replace it with an alternative have collapsed entirely.”
Let’s also be clear about something else: What “progressive” politicians want, and their academic and media cheerleaders like, most Americans don’t want or like.
Regardless of the outcome of the presidential election, Obamacare, heading into year seven, remains persistently unpopular—with more and more people saying the law is hurting them.
Moreover, the law is not working as officially anticipated. The proof is in the data.
For 2016, the Congressional Budget Office initially projected 21 million people would enroll in the exchanges. The reality: Only about 11 million enrolled.
For 2017, the Obama administration is projecting 13.8 million will sign up for coverage in the exchanges. You can bet, however, that the actual number who remain will be significantly less.
According to the Kaiser Family Foundation, 17 million more people have health insurance in 2016 compared to 2013. But the so-called “market” is churning rapidly.
Examining complete enrollment data for the 2014 to 2015 period, a Heritage Foundation analysis shows that enrollment in individual insurance (mostly exchange enrollment) increased by 5.8 million, while total private employer market enrollment fell by almost 3.6 million.
This means that total private market coverage over that two-year period increased by almost 2.3 million. On the other hand, Medicaid coverage jumped by almost 11.8 million.
So, Obamacare is mostly a major Medicaid expansion. The law is not encouraging Americans’ enrollment in a robust, well-functioning private insurance market; it’s discouraging it.
Consider insurer supply. Obama promised health insurance market competition would blossom. In 2014, Urban Institute analysts, examining the impact of the law in 10 states, concluded: “The Affordable Care Act has resulted in considerable competition.”
A Heritage analysis in 2014, however, examining insurers’ participation in all 50 states, came to a different conclusion; it found a 21.5 percent reduction in the number of insurers nationwide, reflecting the transition from 2013 to 2014.
During that big transition, millions lost their health insurance plans whether they liked them or not. Liberal commentators dismissed these losses as the elimination of “junk plans” or “substandard plans,” meaning they imposed excessive out-of-pocket costs or provided insufficient coverage.
But today enrollees on the Obamacare exchanges face standard “silver” plan deductibles that average $3,572 for single coverage and $7,474 for family coverage. For the lowest-cost “bronze” plans, deductibles amount to roughly $6,000 for single coverage and $12,393 for family coverage.
Taxpayers subsidize the vast majority of exchange enrollees, more or less heavily, depending on their income. Eligibility for insurance premium subsidies ranges from 100 percent to 400 percent of the federal poverty level, and the lowest-income enrollees benefit the most.
Even so, the Kaiser Family Foundation finds that 40 percent are dissatisfied with their premiums and 46 percent are unhappy with their deductibles.
For any person making in excess of $47,080 per year—a large chunk of America’s middle class—there are no Obamacare taxpayer subsidies for either premiums or deductibles for individual insurance. Unless he or she is self-employed, there is not even any tax relief.
These folks, of course, can buy outside the Obamacare exchanges, where they are likely to secure broader provider networks in the standard health plans, but they pay even higher premiums and deductibles. But they can’t just buy health plans tailored to their personal wants and needs.
Meanwhile, the meltdown of health insurance competition intensifies. In 2017, 15 new insurers will enter the exchanges, but 83 insurers are dropping out. Moreover, according to the latest Heritage review of the data, one-third of all U.S. counties (32.8 percent) will have only one insurer and another third (35.9 percent) will have only two insurers.
So, private insurance plans fail, fewer doctors are in the exchanges, Americans have less choice and face less competition. To keep supply up, the administration and its congressional allies want to bail out insurance companies—with more subsidies. To keep demand from falling through the floor, several “progressive” proposals would increase taxpayer subsidies to alleviate the law’s ugly impact on enrollees’ cost sharing.
The most far-reaching proposal would offset all out-of-pocket costs in all private insurance, both in and out of the exchanges. That would be enormously costly for taxpayers, and explode the nation’s deficit by as much as $90 billion in 2018.
No surprises here. The tacit premise of Washington’s central planners is that anything they screw up can be fixed. Just add more government micromanagement and more taxpayers’ dollars.
Robert E. Moffit, a seasoned veteran of more than three decades in Washington policymaking, is a senior fellow in The Heritage Foundation's Center for Health Policy Studies.
Editor's Note: This piece was originally published by The Daily Signal.