Health "Reform" Will Haunt Dems

President Obama promised that his health reform would "fix" our rising medical costs and a growing legion of uninsured Americans priced out of coverage.

Fix it in which direction?

Data out last week shows that the price of insurance is rising even faster than before, the number of uninsured Americans is spiraling upward, and the choices people have of doctors and health plans are being sharply constrained as a result.

Welcome to ObamaCare, Year One. This is the change we should start believing in.

The Obama team blames the recession or the "greedy" insurance industry for these ills. But managed-care firms are simply passing along ObamaCare's higher costs, and the recession can't account for all of these setbacks.

The irony is Obama seems certain to run for re-election in 2012 in a country where far fewer people have health coverage than before he tinkered with the system, and those with insurance find themselves paying more money for less.

If Democrats think the Obama health plan is hard to campaign on in this year's political cycle, just wait until the next election.

First, to grapple with a myriad popular but costly new mandates that ObamaCare imposes (such as removing lifetime limits on benefits), employer-based plans have hiked premiums and are passing more costs onto consumers through rising co-pays.

The president is blaming insurers for these unpopular developments rather than acknowledge the role his health plan has played.

The Obama team calculated that up to 85 percent of employer-based plans would absorb the costs of ObamaCare's mandates. After all, changing their benefit packages would mean employer plans are no longer "grandfathered." That leaves them subject to the full brunt of ObamaCare's hundreds of other expensive rules and mandates.

But a recent survey of 1,100 businesses by the consulting firm Mercer finds that only 53 percent of employer plans will try to retain their grandfathered status. The rest have calculated that they're better off stripping down their policies than absorbing the costs of any new mandates. They need the flexibility to change their policies in order to deal with all the many other costs that ObamaCare sets in motion.

The changes employers are opting for are higher deductibles and more cost sharing. They're also cheapening health plans by narrowing the rosters of physicians and hospitals that a patient can choose from and cutting "out of network" options. So much for Obama's promise that you can keep your doctor.

In many ways, the resulting policies are a throwback to the original model of managed care, when HMOs maintained tight networks of eligible doctors and closely managed what kinds of tests and treatments physicians could order. Employers are pursuing these options because ObamaCare did almost nothing to try and lower the cost of medical care. It only subsidizes our existing inefficient system and throws about 20 million more people onto a crumbling Medicaid program. It's left to insurers to figure out how to hold down premiums and medical inflation.

The president is blaming insurers for these unpopular developments rather than acknowledge the role his health plan has played. Much harder for Obama to dodge will be the rising tide of Americans lacking any health insurance.

Census data released last week showed that nearly 51 million didn't have coverage in 2009, up 10 percent from the 46 million lacking insurance in 2008. Also, for the first time in 23 years, the number of Americans with insurance declined.

Much of this is a product of the recession, but some is a consequence of employers who are sitting on their hands when it comes to expanding coverage or offering health insurance for the first time. These employers are waiting to see what happens when the Obama health exchanges get started in 2014 and provide a way for small employers to inexpensively dump the burden onto the government.

Democrats are betting that the "exchanges," which offer consumers subsidized access to federally regulated coverage, will ease all these woes. But scuttlebutt in Washington is the Obama team is far behind in setting up this program.

Moreover, the magnitude of the problem--more uninsured Americans and higher medical costs--is tracking far worse than was calculated when ObamaCare passed. By 2014, the exchanges will be a deficient remedy matched against a problem that the president only intensified during the intervening years.

For Democrats, this means ObamaCare will haunt them through three elections (and maybe more). For patients, it means that the health-care system is getting a lot harder for us to access and pay for.

Scott Gottlieb, M.D., is a resident fellow at AEI.

Photo Credit: White House Photo by Pete Souza

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