A few months after Obamacare was enacted, three of my colleagues and I began work on a book to explain, as the title says, “Why Obamacare Is Wrong For America.”
It was published exactly a year after the law was signed, and virtually everything we predicted then has happened (except where parts of the law were subsequently changed, such as repealing the long-term care entitlement that even Democrats called a Ponzi scheme).
As the law approaches its 10th anniversary, Democratic presidential front runner Joe Biden says he wants to “protect and build on” Obamacare. But the law did little or nothing to improve the market and, in our view, has exacerbated problems in our health sector.
The bottom line: Yes, millions more people now have coverage, but not because of Obamacare’s “reforms.” The net reduction in the uninsured is almost entirely attributable to making non-disabled adults eligible for Medicaid—a program designed as a safety net for the poor and vulnerable. Virtually all of the newly-insured are getting huge government subsidies to underwrite their increasingly expensive coverage.
Taxpayers also are spending hundreds of billions of dollars to provide premium subsidies to roughly eight million people getting health insurance through the exchanges (some of whom lost more affordable plans they had before the law passed). The combination of Obamacare mandates and the subsidies are fueling rising costs that now are the central political focus.
I said this newsletter would offer short takes on policy, so here are just three of the top reasons why the law failed to fulfill its political promises and why it is the wrong platform for reform. More to come…
- Health insurance premiums more than doubled in the four years after the law passed. (The Trump administration has taken a number of steps to help get costs under control, but the base costs are still far too high.)
- Millions of families are losing their insurance because of costs. They simply can’t afford the expensive health insurance that Obamacare requires. A dad in Fredericksburg, Virginia, said his health insurance premiums cost $4,000 a month—far more than his mortgage. He doesn’t get subsidies and isn’t sure he can continue to provide insurance for his family.
- Obamacare required health insurance to cover a long list of “essential benefits.” Insurance companies tried to keep premiums as low as they could despite the new benefit mandates so they instead jacked up deductibles and copays and created ultra-narrow networks. Some people now have deductibles of $6,000 to $10,000. “I might as well be uninsured,” one person told us, “because I can’t afford to pay so much before I can get medical care.”
The federal government is out of its element in trying to manage something as complex and personal as health care and coverage. Obamacare proved that.
The right level of government to oversee health insurance markets are states and localities, which have decades of experience and can more readily adjust policy changes to meet the resources and needs of their communities. Stay tuned for the 2.0 version of our Health Care Choices plan for more details.