The continuing revelations of the meltdown of the Obamacare website have obscured news of a problem that is much more difficult and perhaps impossible to fix with President Obama’s namesake health care plan. New information suggests that there are at least three separate problems that threaten the viability of the entire Obamacare premise. In fact, early signs point to the possibility that more Americans will be uninsured under Obamacare than before. As Rep. John Barasso (R-Wy.) said on the Sunday, Oct. 27 edition of ABC’s “This Week, the problems with Healthcare.gov are “the tip of the iceberg.”
First and most obvious, health insurance premiums have not decreased due to the Affordable Care Act as Barack Obama promised. Instead, an analysis of HHS data by Forbes found that few Americans will see decreases in average premiums. The HHS data, which detailed premiums for 27-year-olds and the average-age exchange participant for each state, found that premiums for the younger group would increase by an average 97 percent for men and 55 percent for women. Forty-year-olds, which were used to approximate the average participant, saw an increase of 99 percent for men and 62 percent for women.
For the majority, the higher premiums are not offset by subsidies according to the Forbes data. Twenty-seven and forty-year-olds would have to earn almost 60 percent less than the median income of their age group (around $40,000) to qualify. Members of the middle class, who do not qualify for subsidies, face a combination of higher insurance premiums as well as higher taxes built into the law to pay for subsidies for the poor.
The website Obamacarefacts.com, which says in its Facebook page that it is “a group of private citizens with no funding from any party,” doesn’t dispute that premiums have increased, which it says is “a sore subject with many readers.” Instead, Obamacarefacts acknowledges that the requirements “to cover high-risk consumers,” cover “Americans with pre-existing conditions” and community rating to prevent “higher rates based on health status or gender” have caused premiums to increase. Other factors, such as eliminating benefit caps and requiring plans to cover children up to age 26 also serve to increase premiums.
Obamacare’s high premiums contribute directly to the second problem, the fact that more than half of the enrollees on the health insurance exchanges are signing up for Medicaid and not private insurance. CNN reported on Oct. 27 that government data showed that, of the 700,000 applications on the health insurance exchanges so far, most have enrolled in Medicare. The report raises the prospect that not enough healthy, younger Americans are signing up to pay the high prices that will theoretically support the premiums of older and unhealthy Americans. CBS News confirmed that in Washington, of the more than 35,000 people newly enrolled, 87 percent signed up for Medicaid. In Kentucky, out of 26,000 new enrollments, 82 percent are in Medicaid. In New York, Medicaid accounts for 64 percent of 37,000 enrollments.
The combination of high premiums and difficulties with the web site may explain why young, healthy consumers aren’t opting in. Older Americans and those with health problems have more of an incentive to invest the time required to successfully apply for an Obamacare policy.
Gail Wilensky, a former Medicaid director, told CBS News, “Either the private insurance enrollments come up somewhere around the expected amount or there's going to be a problem. ... You need a volume and you need a mix of people that are healthy as well as high users in private insurance, in order to have it be sustainable.”
The third problem is that the Affordable Care Act actively works to decrease the number of people in private insurance. Because Obamacare mandates a list of essential health benefits for insurance plans, many existing policies do not meet the new standard in spite of President Obama’s promise that “If you like your health care plan, you can keep your health care plan.” As a result, hundreds of thousands of Americans are receiving cancellation notices from their insurance companies. In California, Kaiser Permanente is canceling 160,000 policies. Florida Blue is canceling 300,000 policies. As many as 16 million Americans may lose their coverage according to an estimate in the New American. Forbes notes that the cancellations in three states – Florida, California, and Pennsylvania - are more than the total number of Americans who have applied for coverage under Obamacare.
When policies are canceled, people have the choice of paying higher premiums through Obamacare or being uninsured. One such American is Kirsten Powers, a liberal columnist and Obamacare supporter. The 44-year-old Democrat’s policy with a $2,500 deductible was canceled, she noted on Fox News, adding that she can get a similar policy, but the premium will increase from $160 to $300 per month.
Democrats have responded to the premium increases by noting that the new and improved policies are much better than the ones being canceled and that part of the increase will go to help the uninsurable. To voters who relied on President Obama’s promises of lower rates and keeping their old policy, that may not be much of a consolation.