Trying to be objective about Obamacare seems to be as difficult as with every other major policy issue these days. The newspaper headlines from the media are saying thousands of people will die if Obamacare is repealed. The Washington Post in a January 23 story cited estimates by medical professors who estimate the number at 44,000 annually. Bernie Sanders said 36,000 will die. These numbers assume no replacement plan which no Republican is advocating.
I looked at some statistics to see whether Obamacare is as good or as bad as critics say. First Obamacare definitely added millions of people to the insured category. That is a fact not disputed. The HHS says 20 million people have been added to the insured rolls since 2010. About 12 million are in the exchanges and the rest are covered by Medicaid expansion. We also see several million children under 26 kept on their parents’ plan.
The issue to debate is did we add enrollees cost effectively. Are we all paying more to insure these 20 million than we should? Republicans say there are better ways to get people coverage. Did costs rise? Yes, they did for Obamacare enrollees and those covered by employers as well. In 2008 according to the Kaiser Family Foundation the average family plan cost employers $12,680 with $3,354 borne by employees. In 2016 costs were $18,142 with employees picking up $5,277. Supporters of Obamacare say costs were rising before it was implemented so this rise is not from the Obamacare provisions.
That is not the only problem. Deductibles have risen dramatically. In 2008, only 16% of employer plans had deductibles of $1,000 or more. In 2016, 51% of employees covered had $1,000 or more in deductibles. On the Obamacare exchanges the situation is much worse. Deductibles vary by type of plan chosen with more expensive premiums providing lower deductibles. The popular Bronze plans average more than $5,000 in deductibles. It is probably fair to attribute these huge deductibles partially to the coverage mandates.
We are also seeing many state exchanges showing huge increases in premiums with the average being 15% in 2016. Many families are paying well over $10,000 in premiums and deductibles. For them Obamacare essentially just covers them for a catastrophic illness. It is true they get a free prevention exam and some other free diagnostic tests but that is not much for their $10,000.
Supporters of Obamacare say having 20 million more people covered is a societal benefit worth paying for by all of us. Maybe it is, but just maybe we are all paying more than we need to if we had a different approach. The Republicans say they can provide better coverage at lower cost. They think free market insurance competition and giving the states more control over budgets can lower cost. They also think that more consumer responsibility for spending decisions will make patients more aware of cost and provide pushback on healthcare prices.
What is very clear is that Mr. Obama’s promise of lowering premiums for every family was not achieved. In 2008 he promised the average family will save up to $2,500 a year. Many markets now only have one insurer willing to provide coverage. Clearly this reduced competition is not helping lower premium rates. While more people are covered today than pre-Obamacare, the jury is out on whether we are better off. That depends on who you are. Anyone with a pre-existing condition is likely better off. Those of us who had employer coverage before are likely not better off today because we are subsidizing insurance companies mandated to cover pre-existing conditions.
Democrats find many examples of the poor or people previously denied coverage who now have access to care. They tout these as reasons to keep Obamacare. Analyzing success, however, must also include the effects on everyone who is asked to pay for it. My guess is we have better alternatives that will provide coverage for less. That does not mean all people currently insured and subsidized will be better off under a new Republican plan. What is clear from Obamacare is insuring people already sick is very expensive and that healthy people do not sign up in high enough numbers to subsidize those folks.
As a compassionate society, we should not let people lose their life savings or get no care because they get sick. That does not mean we cannot create a much more targeted and affordable plan to do that. The proof will be in the details from the replacement plans proposed. Level headed analysis rather than hyperbole is what is needed in Congress but we do not seem to be in the political mood to do that. Keeping an unaffordable plan is not the answer the American people are seeking.
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