Pay No Attention to the Healthcare Catastrophe Behind the Curtain

Pay No Attention to the Healthcare Catastrophe Behind the Curtain

new report from the Biden administration purports to be a clear-eyed assessment of where the Affordable Care Act stands after 12 years on the books. In fact, it’s a piece of pro-Obamacare propaganda — and an especially dishonest one at that.

Titled “The State of the ACA,” the study opens with the assertion that Obamacare “is at the strongest point in its history.” For evidence, it points to record-high enrollment on the law’s health insurance marketplaces.

Such cheerleading conceals a far bleaker reality. Obamacare has made coverage unattractive and unaffordable for millions of Americans. Congress and the Biden administration have compensated for this stunning failure by offering massive subsidies to marketplace consumers at enormous expense to taxpayers.

Bribing Americans to purchase exchange coverage isn’t sustainable. And it wouldn’t be necessary if Obamacare was the success the Biden administration pretends it to be.

Between 2013 — the year before Obamacare’s insurance exchanges opened for business — and 2019, average individual market premiums increased 143%, from $242 per month to $589 per month. This was the direct result of its onerous regulations on health insurance.

Surging premiums help explain why marketplace enrollment actually fell for four consecutive years beginning in 2017. That same period saw a years long increase in the uninsured rate — the opposite of what Obamacare was supposed to achieve.

Congress and the president managed to reverse this enrollment free-fall in the crudest possible way — by paying Americans to sign up for exchange plans. The American Rescue Plan Act, eliminated Obamacare’s income cap on eligibility for subsidies. Before last year, only people who made less than 400% of the poverty level, or $111,000 for a family of four as of 2022, could claim subsidies.

The legislation also made those subsidies more generous. The most that any family would have to pay for coverage was 8.5% of income.

Sure enough, this made plans more affordable for millions of Americans. As the new study notes, without these subsidies, average exchange plan premiums would have been 53% higher in 2022.

So it’s no surprise that marketplace enrollment reached a record 14.5 million this year. That record is still a long way from the 25 million enrollees the Congressional Budget Office predicted in 2014 that the exchanges would have each year from 2017 to 2024.

The generous exchange subsidies were an emergency measure. They’re set to expire at the end of the year.

If Obamacare is truly “at the strongest point in its history,” then why is the federal government spending billions of dollars propping up its exchanges?

Democrats know that people will flee the exchanges if the government stops paying their bills. So they’re trying to make the enhanced exchange subsidies permanent. The consequences of doing so would be dire.

First there’s the cost to taxpayers. According to the Congressional Budget Office, these expanded subsidies would cost the federal government nearly $260 billion between now and 2031.

Just as troubling is that permanent subsidies would contribute to the inflation crisis that has sent prices soaring in nearly every sector of the economy. By insulating consumers from the cost of health care, the subsidies free insurers and providers to hike their rates with relative impunity.

At a moment of immense economic uncertainty and record-high inflation, Biden has spent billions of taxpayer dollars covering up for Obamacare’s failures through enhanced premium subsidies. Worse, he plans to spend hundreds of billions more to keep up the charade.

If he wants to pretend his health-policy quagmire is a historic success, he’ll need more than a disingenuous federal study.

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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.