Recently, President Biden invited former President Obama to the White House for a celebration of ObamaCare and to push for expansion of its rolls. It has now been 12 years since the passage of this new healthcare legislation in 2010 and now seems a good time to review just how well the Affordable Care Act – ACA (ObamaCare)has lived up to its hype.
John C. Goodman, healthcare economist helps us remember the promises made by Barack Obama when he ran for president the first time in 2008. He pledged the following:
- Insure the uninsured with private coverage
- Bring down healthcare costs, with savings of $2500 a year for every family
- Give people with inadequate insurance better insurance
- Protect people with good coverage – “If you like your doctor, you can keep your doctor.”
- End discrimination against people with pre-existing conditions
Now let’s look at the actual record.
Expanding Medicaid
Despite all the hype about increasing the rolls of the insured, nearly all of the gains made in that area are due to increased Medicaid enrollment. In fact, some have referred to the ACA as the “Medicaid Expansion Act.” Millions were intentionally newly enrolled in Medicaid by expanding the eligibility requirements, but millions more were illegally enrolled because of lax governance – leading to billions of dollars of improper payments.
This is not what voters were promised. Medicaid pays the lowest rates to providers, so many doctors won’t see Medicaid patients. Those that do will usually have limited numbers of appointments in their schedule for these patients. That leads to poor access to healthcare for Medicaid enrollees and that leads to overcrowding in emergency rooms for primary care. The result is poor quality healthcare.
How poor you say? The Oregon Health Insurance Experiment is an ongoing study begun in 2007, which has already revealed significant information. Thus far, researchers have learned that having Medicaid does not improve health, at least in standard measurements of blood pressure, blood sugar, and cholesterol. Medicaid reduced observed rates of depression by 30% but increased the probability of being diagnosed with depression. Medicaid significantly increased the probability of being diagnosed with diabetes and the use of diabetes medication, but did not have the expected impact of lowering blood sugar.
Goodman has said that having Medicaid may actually be worse than having no insurance at all. This statement is supported by the fact that Medicaid enrollees are 40% more likely to use the Emergency Room than the uninsured. Therefore, expanding Medicaid, rather than relieve the overcrowding of emergency rooms, has probably made it worse. Moreover, the influx of mainly healthy people onto the Medicaid rolls has apparently siphoned money away from developmentally disabled children on the state Medicaid waiting lists. Thousands of these children die every year, according to Goodman, who might have survived with proper care.
Wasting Taxpayer Dollars
Meanwhile, most of the money spent on private coverage has accomplished very little. Despite spending more than $50 billion a year on ObamaCare subsidies in the individual health insurance market, the increase in coverage prior to the pandemic was anemic. Goodman calculates we spent about $25,000 of subsidy every year for every newly insured individual, or $100,000 for a family of four. Moreover, if we consider the offsetting reduction in employer-provided coverage over the same period (partly as a result of ObamaCare), you could argue that the entire $50 billion was money down the drain.
Making Insurance Unaffordable
The name of this healthcare reform bill, the Affordable Care Act, would seem to be a misnomer. Between 2013 and 2019, premiums in the individual market more than doubled and deductibles skyrocketed. Combining the average premium with the average deductible, last year a family of four not receiving a subsidy had to pay $25,000 out of pocket before receiving any benefits at all from their health plan!
Then consider low-wage workers employed by fast food chains and others. Under the law, employers are required to offer coverage and charge their employees no more than 9.6 percent of the employee’s annual salary. However, these plans can have a deductible of $8,700 and the employee must pay the full premium to cover any dependents. This has been referred to as the “family glitch.” (see Biden’s Fix of the ObamaCare Glitch) Most workers turn these offers down and then they are not entitled to any subsidies.
Throwing Good Money after Bad
The declining attractiveness of ObamaCare insurance, if unsubsidized, has left many healthy people without coverage. To patch this leak in the dyke, Congress created new subsidies for families above 400 percent of the Federal Poverty Level (FPL) with the American Rescue Plan – passed without a single Republican vote just like ObamaCare. Goodman says not only are these subsidies regressive, they are also very wasteful – since they go manly to people who are already insured elsewhere. On net, the new subsidy is costing an estimated $17,000 a year for every newly insured person, or $68,000 for a family of four.
Outlawing Insurance that Meets Family Needs
We all know by now that Obama’s promise that “if you like your doctor you can keep your doctor” was false. Obama tries to defend this broken promise by insisting his program substituted better insurance for “junk insurance.” This statement is also false.
A popular alternative to ObamaCare is short-term, limited duration insurance (STLD). These plans get around the onerous and expensive “essential health benefits” of ObamaCare that make it unnecessarily expensive. Yet Obama restricted such plans. President Trump rescinded this decision, making more of these plans available. Naturally, Biden intends to reverse Trump’s decision.
Making Things Worse for Patients with Pre-existing Conditions
Perhaps the most popular provision of ObamaCare is eliminating pre-existing conditions as a cause of disqualification. Yet, the reality is that problem affected few people due to federal risk pools that allowed those with pre-existing conditions to still get affordable coverage. Only about 100,000 people ever used these pools in a given year.
Today, due to the escalating cost of insurance coverage, everyone who comes to the individual market faces sky-high premiums and deductibles and narrow networks that exclude the best doctors and hospitals. ObamaCare insurance is not accepted at the most prestigious medical centers and most popular doctors’ offices throughout the country.
Broken promises and escalating costs are the legacy of ObamaCare today.
