To hear Obama spinmeisters tell it, Obamacare is doing GREAT! But the companies that actually provide the insurance for Obamacare tell a different story.
The Department of Health and Human Services (HHS), which oversees Obamacare, recently released an optimistic report boasting about how affordable Obamacare is. According to the report:
After taking into account shopping, the average premium among all HealthCare.gov consumers increased 8 percent from 2015 to 2016, not much higher than the 7.2 percent increase in the second-lowest silver plan premium reported at the start of the 2016 open enrollment. The 8 percent increase in the average premium after shopping demonstrates that enrollees’ actual premiums depend on the dynamics of the entire market not just issuers’ pricing decisions.
Now let me remove some of that spin.
Premium increases of 8 percent when inflation is almost zero is not an achievement. A family spending, say, $15,000 a year for coverage through the Obamacare exchange would see a $1,200 increase—$100 a month more.
But here’s where the real deception comes in: notice that the 8 percent increase is “after shopping,” a term mentioned twice in one paragraph.
What that means is that millions of people in the exchange were hit with unaffordable premium increases and so had to try to find something they could actually afford.
Millions shifted from a more expensive silver plan to a less expensive bronze plan, or chose a plan with a much higher deductible, or settled for a plan with a much narrower network of physicians—or, most likely, all of the above.
This isn’t theoretical. We’ve had to do exactly that in my family—and virtually every other family I know buying in the individual market is doing the same.
But there’s another way HHS is trying to deceive you: it highlights the after-subsidy cost of coverage. “Among the roughly 85 percent of HealthCare.gov consumers with premium tax credits, the average monthly net premium increased just $4, or 4 percent, from 2015 to 2016.”
In other words, after taxpayers are dinged hundreds of billions of dollars paying the higher premiums, those getting the subsidies will only experience a 4 percent increase.
True to the Obama administration’s liberal philosophy, if taxpayers are footing the bill it doesn’t REALLY cost anything.
What Team Obama is doing is comparing apples to oranges—so let’s look at food for a moment. In an era of high food inflation, middle-income families on a fixed budget can alter their buying preferences, choose less-expensive food products, or eat less in order to survive. No administration would call that a victory, yet that’s what this one is doing with health insurance.
Here’s a fact you can take to the bank: had a Republican-passed health care plan caused those premium increases, Democrats would be screaming at the tops of their lungs. Instead, the Obama administration tries to put lipstick on the pig it created.
What’s killing the Obama narrative are the facts. Just last week, McKinsey & Co. released a report showing that health insurers selling through Obamacare exchanges lost more than $50 million in 41 states.
Texas Blue Cross Blue Shield has lost $720 million since the Obamacare exchanges began in 2014, according to an article in the Dallas Morning News. And the Texas Blues’ parent company, which controls Blues plans in five states, lost a reported $2 billion. (I’ve written about other health insurer loses here.)
A new article in The Hill warns that the losses are unsustainable. Larry Levitt of the Kaiser Family Foundation is quoted as saying, “Something has to give. Either insurers will drop out or insurers will raise premiums.” Actually,UnitedHealth Group announced that it is dropping out of Georgia and Arkansas after losing $1 billion on those two markets.
So even as the Obama administration is falsely implying that premium growth is low and consumers are happy, the largest health insurers are bleeding money and threatening to bolt.
Liberals have always preached that no company should profit from health care. Under Obamacare, they’re getting their wish.