Obamacare has failed to increase competition among insurers

Obamacare has done everything short of cure sickness altogether, according to its supporters.

“Ten million Americans have gained health insurance just this past year,” said the president. Former Health and Human Services Secretary Kathleen Sebelius said that patients “will pay less than they pay for their cable or their cellphone bill.” Minority Leader Rep. Nancy Pelosi, D-San Francisco, claimed the law offered not just health care but the “liberty to pursue your happiness.”

Unfortunately, the facts indicate otherwise. Obamacare is not fulfilling its promises – and is instead harming the taxpayers and patients it was meant to protect.

Obamacare’s primary objective was to extend affordable health insurance to uninsured Americans. Thanks to the law, many have secured coverage.

But as many as 89 percent of those who signed up for health insurance through the law’s exchanges when they opened in 2014 already had insurance prior to Obamacare.

In other words, millions of Americans just switched from their old policies to new, taxpayer-subsidized ones.

Furthermore, Obamacare’s cheerleaders have generally touted data on sign-ups – not actual payment rates. Patients may sign up for coverage – but they don’t actually have it unless they pay the premiums.

Last year, Aetna reported 720,000 sign-ups after the first round of enrollment. One month later, the number of paying customers was less than 600,000 – a decrease of more than 15 percent. Blue Cross Blue Shield reported that 15 to 20 percent of its exchange enrollees didn’t pay their first premium last year.

That trend will likely repeat in 2015.

For those who pay their premiums, health care may still not be affordable. Take, for example, patients who need prescription drugs to manage chronic conditions. Many exchange plans force consumers to cover as much as 50 percent of a drug’s cost. As a result, patients can shell out $8,000 per month for the most expensive prescriptions.

These unfortunate patients may have health coverage – but that doesn’t mean they can get health care.

But Obamacare’s supporters say that health care is cheaper for the vast majority of Americans. Indeed, President Barack Obama recently stated that “the price of health care has risen at its slowest rate in about 50 years.”

Next year, however, health costs are expected to increase 5.6 percent. Over the rest of the decade, health inflation will be closer to 6 percent. That’s almost twice the 3.6 percent bump in health costs in 2013.

Insurance premiums could rise 6 to 7 percent this year – and up to 8.5 percent next. Taking co-pays, co-insurance and deductibles into account, the increase could be more than 10 percent.

For these spiraling costs, consumers can thank Obamacare. Despite promises to the contrary, Obamacare has failed to increase competition among insurers. Across all 50 states, the health exchange market had almost 22 percent fewer participating insurers relative to the market pre-Obamacare in 2013.

Insurers that are participating are offering coverage at fewer hospitals in order to keep premiums down.

Furthermore, almost half of all 2014 marketplace plans restricted their beneficiaries to narrow networks of healthcare providers, according to McKinsey & Co.

Higher prices are not yielding better care.

Consider the law’s byzantine regulations governing hospital readmission rates. Obamacare hits hospitals with a 3 percent fine if they readmit too many Medicare patients.

The fines are supposed to incentivize hospitals to address patients’ problems the first time – and thereby reduce the need for costly follow-up visits.

But hospitals are responding by refusing to admit patients in the first place.

Instead, they keep them in far costlier emergency rooms, where they may not get the specialized care they need.

Or they put them under “observation,” a level short of admission that helps providers avoid Medicare’s penalties but doesn’t count toward a beneficiary’s inpatient deductible.

Patients themselves can end up covering the cost of their hospital stay – as well as subsequent treatment like skilled nursing care.

The tab can run tens of thousands of dollars.

The Affordable Care Act was supposed to make health care better.

Instead, many Americans remain uninsured, health care costs will soon skyrocket and the quality of care is declining. It’s time for the law’s supporters to face the facts – Obamacare is making our health care system worse.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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