Democrats in Congress are scrambling to extend the enhanced Obamacare subsidies signed into law by President Biden last year as part of the American Rescue Plan Act.
It’s no mystery why. If lawmakers allow these premium tax credits to expire — as they’re set to at the end of this year — millions of Americans will see the cost of coverage on Obamacare’s exchanges surge.
Progressives have only themselves to blame for this situation. Obamacare’s very structure is responsible for the sky-high premiums Democrats have consistently obscured with ever-greater sums of taxpayer money.
More than a decade after its passage, Democrats are still pleading for emergency infusions of cash to keep the law afloat. That should be a sign that the Affordable Care Act has failed to live up to its name.
In 2013 — the year before the exchanges opened for business — premiums for individual market policies averaged just $244 a month across the country. By 2021, they had more than doubled to $644.
At the same time, the array of plan options available to exchange customers has always been meager. In 2018, well over half of counties had just one insurer offering coverage through the Obamacare marketplace. A whopping 82% of counties had two or fewer.
The situation has only improved slightly since then. In 2021, 64% of counties had two or fewer insurers selling plans on the exchanges.
In pitching his health law to Congress during a 2009 address, President Barack Obama himself stated that his “guiding principle is, and always has been, that consumers do better when there is choice and competition.”
It’s a sound principle. If only his eponymous law had promoted such choice and competition instead of quashing it.
Obamacare further reduced choice by micromanaging what insurers could offer. It requires all plans to cover a list of “essential health benefits,” which range from pediatric vision care to psychotherapy. Patients with little need or desire for such benefits have no choice but to accept them. That’s one reason why premiums and deductibles have risen so precipitously.
People struggle to put this seemingly comprehensive coverage to use because many doctors won’t see them.
To provide the mandated benefits without completely taking the lid off of premiums required insurers to limit the number of doctors they’d cover. By one estimate, nearly three-quarters of the policies sold on Obamacare’s marketplaces feature these narrow networks.
As Obama insisted back in 2009, “If you’re one of the tens of millions of Americans who don’t currently have health insurance…this plan will finally offer you quality, affordable choices.”
It has done no such thing. Instead, it’s led to higher premiums, fewer choices and lower-quality care.
An astounding number of Americans who are eligible for government assistance with premiums have chosen to remain uninsured rather than settle for one of Obamacare’s subpar plans. Of the nearly 29 million Americans who lacked coverage in 2021, for example, 38% qualified for premium subsidies.
An analysis from 2020 found that 4.5 million Americans without health coverage actually qualify for a zero-dollar exchange plan. And yet they still chose to remain uninsured.
The Biden administration has helped attract more people to the exchanges by boosting exchange subsidies — effectively paying patients to buy coverage they wouldn’t otherwise want. Many of them make healthy six-figure incomes. It’s precisely those subsidies that Democrats are desperately trying to renew.
The Affordable Care Act travesty has gone on long enough. The law has fallen woefully short of its namesake promise. Funneling more federal money into this broken system won’t change that fact.