The news continues to get worse for the president’s health care law. Amidst the news of low enrollment estimates, exchange failures, and collapse of one-third of Obamacare co-ops, the Washington Examiner editorialized that the problems have only just begun. The editors write, “The important thing is how each of Obamacare’s current problems -skyrocketing premiums, lower than expected enrollment, and the collapse of several cooperative plans - is related to the others." Not only are they related, they are collectively costing taxpayers billions of dollars. As Energy and Commerce Committee Vice Chair Marsha Blackburn said last week, “the dominoes continue to fall on Obamacare." As the costly failures pile up, the committee continues to put taxpayers first.
Oct. 20, 2015
EDITORIAL: Obamacare’s problems are only just beginning
The catastrophic failure of Obamacare’s launch is now far in the past. But the public’s acquiescence to a law that keeps creating new problems should not be taken as a sign of enthusiastic acceptance, much less as a sign that Obamacare is working.
The important thing is how each of Obamacare’s current problems -skyrocketing premiums, lower than expected enrollment, and the collapse of several cooperative plans - is related to the others.
Obamacare plans debuted with more expensive premiums than before, but not as expensive as some had expected. This allowed the law’s supporters to assuage public panic over the debacle of 2013 and 2014. Why were prices still relatively low? It’s partly because insurers found other ways to pass costs to consumers - by raising deductibles (the amount customers must pay before the coverage kicks in) and narrowing their supported provider networks. That won’t change, and it is an ongoing source of discontent.
But the Obamacare exchange program itself also gave its participating insurers a set of training wheels for the first few years to allow for such aggressive pricing. Two temporary programs help them limit risk: A government-run reinsurance program, and the “risk corridor" provision, which makes insurers that have fewer losses on medical claims than expected subsidize the insurers that lose more than expected.
With these backstops, insurers took big risks, expecting a bailout. But because few insurers made big money on Obamacare plans, the risk corridor program has only collected about one-eighth of what it would take to pay the full bailout that the losers were expecting. This is part of the reason eight health insurance cooperatives have now folded. Their exit from the market will reduce competition and cause premiums to rise. …
As for government subsidies for buying insurance, those basically vanish for workers approaching the median income. The affordability problem, in turn, will get worse as the insurers’ “training wheels" vanish in 2017 and more insurers drop out of more Obamacare exchange markets.
Next summer, Americans will have a chance to see what the insurance market looks like when those training wheels are removed when insurers announce plans for 2017. And Obamacare’s backers, who thought the worst was behind them, will have some more explaining to do.
Read the full editorial online HERE.
