After months of reassuring Americans that all is well with ObamaCare, federal officials are changing their tune. The U.S. Department of Health and Human formally announced last week that premiums for 2017 ObamaCare plans will be increasing by 25 percent, on average. That’s a far cry from the thousands of dollars of savings President Obama promised American families before the law passed.
This is according to the federal government’s own numbers. The 25 percent premium increases apply to what’s known as “benchmark” silver plans on Obamacare exchanges. Benchmark plans are the second least expensive plans sold in a state. These plans are especially important, because their premium rates are used to determine the levels of subsidies given to eligible individuals enrolling in their state exchange.
Here’s the problem—these plans were supposed to represent the best value available on the exchange system. They offered more comprehensive coverage than the bare minimum bronze plans, while remaining less costly than the premium gold and platinum plans. The fact that these benchmark plans are now subject to double-digit rate increases is a very bad sign for the American health-care system.
So what happens now? If no changes are made to Obamacare, Americans can expect more of the same. Premiums will continue to rise, out-of-pocket costs like deductibles will continue to grow, and patient choices will continue to shrink as insurers narrow their provider networks in an effort to try and control costs.
These trends have already been well documented. A BlueCross BlueShield study publishes this January illustrates that HMOs and narrow provider networks are now prevalent in 52 percent of healthcare plans sold on the exchange, an increase of 11 percent from 2015.
Likewise, a recent TransUnion study showed that out-of-pocket costs increased 13 percent between 2014 and 2015, Obamacare’s first year in effect. The study also revealed the shocking fact that over half of all patients carry at least $1,000 in medical debt – an unfortunate side effect of high premiums and high out-of-pocket costs.
To try and negate Obamacare’s downward spiral, proponents of the health care law have proposed some changes: tightening enrollment periods, increasing the tax penalty attached to the individual mandate, bailing out and extending the various Obamacare insurer programs designed to mitigate insurer losses, and enacting a so-called “public option.”
While some of these policies may have some superficial effect on enrollment numbers, none offer any hope of addressing the underlying problems plaguing the American health care system. They would all prop up Obamacare and ensure it continues harming Americans for years to come.
Any meaningful health care reform would put patients back in the driver’s seat when it comes to their own health care choices. Yet Obamacare is pushing American health care in the opposite direction.
Insurance coverage standards have given the government greater control over determining what coverage and benefits consumers receive, needlessly driving up costs for Americans who may not need coverage that fits the government’s standard. Meanwhile, the millions of Obamacare patients who get coverage through Medicaid receive only 20 to 40 cents of benefit.
For the majority of Americans under age 65, healthcare is less affordable than it was before 2014. But the administration’s response to the myriad issues in the president’s health care law is the ultimate insult to injury. Vague platitudes about how Obamacare is just a “starter home” for long-term reform won’t help families who have had to cut their food, housing, and transportation budgets to make room for more expensive health insurance premiums and higher deductibles.
These families don’t want starter-home health care—they want something that works. Obamacare isn’t it.
Melissa Fausz is a Senior Policy Analyst at Americans for Prosperity.