Obamacare's failure

A column on the Real Clear Politics site, by Jack Kelly, dated June 7, 2015, entitled “Spare Us From Obamacare,” makes very interesting reading. So I reproduce it here.

The Affordable Care Act isn’t.

Some major health insurers seek eye popping rate increases for 2016 — such as 25 percent in Oregon, 30.4 percent in Maryland, 36.3 percent in Tennessee, 51.6 percent in New Mexico.


Insurance commissioners won’t approve all companies ask for. Rates will rise modestly in some states. But the odds are your premium will cost a lot more next year.

Premiums for non-group policies rose 24.4 percent more last year than they would have without Obamacare, said the National Bureau of Economic Research. Premiums in this market rose more after two years of Obamacare than in the eight years preceding, said eHealth Insurance, a private health exchange.

Despite subsidies for the industry of at least $16 billion, many insurers lose money. Far fewer individuals signed up for Obamacare than expected (and the administration claimed). Those who did are older and sicker.

“Only about 40 percent of those eligible eventually signed up after two full open-enrollments,” insurance expert Robert Laszewski told the Washington Examiner. “Carriers need more like 75 percent.”

Subsidies for insurance companies mask the true cost, said Stephen Parente, director of the Medical Industry Leadership Institute. Unless reauthorized in 2017, premiums for the cheapest plan could rise nearly 100 percent for individuals, 50 percent for families, he said.

That’s on top of sky-high deductibles. The average deductible for the cheapest Obamacare plan is about $5,180 for individuals, $10,500 for families — four times the IRS threshhold for a “high deductible” plan.

The column then cites an example of why Obamacare hardly qualifies as useful insurance:

Patricia Wanderlich, who suffered a brain hemorrhage in 2011, skipped the brain scan she should have every year because her Obamacare policy has a $6,000 deductible.

“To spend thousands of dollars just making sure (her aneurysm) hasn’t grown?” Ms. Wanderlich told The New York Times. “I don’t have that money.”

The column then goes on to cite some interesting statistics:

About 25 percent of non-elderly Americans with private insurance can’t afford to pay a mid-range deductible ($1,200 for individuals, $2,400 for families), The Wall Street Journal said in March.

People with a policy they can’t afford to use are no better off than the uninsured. Which may be why — despite the threat of fines — so few without insurance signed up for Obamacare.

About 75 percent of those who did are subsidized. Subsidies could end for people in 36 states if later this month the Supreme Court rules for plaintiffs in King v. Burwell.

We have, of course, already discussed this case, but the column makes a good reminder of what it entails:

As written, the ACA permits subsidies only for insurance purchased on exchanges “established by the state,” plaintiffs note.

That was a drafting error, politicians told New York Times reporter Robert Pear. Not true.

The words “established by the state” appear nine times in the ACA. No “drafting error” is repeated that often.

And finally, in summary:

Nearly every promise Democrats made has been broken. The average family pays more (some much more) for insurance, not $2,500 less. About 9 million Americans (so far) have learned they couldn’t keep the health plans they had if they wanted. Or some of their doctors.

Federal spending for health didn’t go down. It’s zoomed upward. So have emergency room visits. Overhead costs are exploding.

The Congressional Budget Office estimates that Obamacare will lower full-time employment by 2.3 million in 2021, compared with what might have been without reform.

The ACA has hurt millions more than it’s helped. The worst is yet to come. President Barack Obama delayed or altered (mostly illegally) unpopular provisions at least 50 times. If they’re implemented fully, up to 100 million who get insurance from their employers could have their policies canceled, the American Enterprise Institute has estimated.

As premiums and deductibles rise, and the job-killing employer mandate goes into effect, a “death spiral” — begun because so few healthy people have signed up — will accelerate. If the Supreme Court rules the ACA must be enforced as written, it would be a mercy killing.