Saturday, October 17, 2015

ACA/Obamacare: Enrollments Decreasing at an Increasing Rate

“Today, the Obama administration announced that it projected dramatically lower enrollment growth for Obamacare’s exchanges in 2016: only 1.3 million, compared to a prediction of 8 million when the law was passed five years ago.

The problem is fairly easy to understand. Obamacare imposed thousands of pages of new federal regulations on the market for private-sector health insurance purchased by individuals. These regulations mandated that all plans had to pay for a wide range of services, even if policyholders didn’t want them. They forced young people to pay double, and sometimes triple, what they had been paying before for coverage. And plans were required to provide higher financial payouts than they previously had to.

All of these bells and whistles cost money. And so, in 2014 alone, in the average U.S. county, Obamacare drove up the price of individually-purchased health insurance by 49 percent. In 2015 and 2016, additional double-digit rate hikes have been common throughout the country.

ACA enthusiasts disputed the significance of this problem, arguing that taxpayer-funded subsidies would compensate for the higher premiums. But there were always several flaws with that argument. First, subsidies don’t fall from the sky; they’re paid for by imposing additional costs on taxpayers. Second, the subsidies are only large enough for people whose incomes are near the poverty line. Those in the lower-middle class and above don’t receive subsidies that are large enough to compensate for Obamacare-induced rate shock.

In March, Caroline Pearson of Avalere Health published an analysis examining Obamacare enrollment relative to the number of people actually eligible for the law’s insurance subsidies. In a report entitled “Exchanges Struggle to Enroll Consumers as Income Increases,” she observed what should have been obvious in 2010: that those who are more exposed to Obamacare’s rate hikes—by being eligible for fewer subsidies—were not signing up.” - Flatlined: White House Says Obamacare Exchange Enrollment Growth To Collapse In 2016, Forbes, 10/15/2015

Link to the entire article appears below:

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