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Uncle Sam will spend $2.6 trillion on Obamacare over the next 10 years, according to the Congressional Budget Office. What’s remarkable is how few people this will leave better off.
The middle class is a clear loser: It gets squeezed, since these people earn too much to qualify for adequate subsidies, but too little to afford the needlessly pricey exchange coverage.
The working poor get higher subsidies, so many will secure insurance that they once couldn’t afford. But when they go to use these plans, they’ll typically find a very limited choice of doctors — and hefty out-of-pocket bills.
As for solving the problem of the uninsured, the president’s own estimates are that half of the people he expects to insure really end up in the decaying Medicaid program. (That was before the Web site debacle slashed all Obamacare enrollment estimates.)
Start with the coverage.
Many Americans have had policies that the president calls “substandard” canceled; they’re being pushed into the Obamacare exchanges — where they’ll find they’re worse off. President Obama will soon become the country’s biggest purveyor of second-rate coverage.
Many of the policies sold in the exchanges are “narrow network” plans with very limited choice of doctors. Consumers and congressmen alike soundly rejected similar schemes in the 1990s, when they were first tried as part of a new style of very restrictive HMOs. Now Obamacare is forcing them back on us, like it or not.
Obamacare goes even further, with new ways for health plans to constrain your choice of providers. One “modernization” is to require insurers to craft plans only by “region” rather than by state, with many regions as small as a single county.
So some plans will only include doctors in your local neighborhood. Obamacare dubs these “Exclusive Provider Organizations”; one of the more affordable such plans I found in Florida has seven pediatricians (not practices, seven actual doctors) for a county with roughly 250,000 children.
Want to see a doctor in another city? It won’t be covered.
This is another nasty innovation. You see, all the president’s boasts that your out-of-pocket costs are capped inside Obamacare are only true if you stay inside your plan’s (small) network of doctors. Go outside that network for anything (other than emergency care), and the whole cost can be out of pocket (and doesn’t apply against your deductible).
The narrow networks are supposed to keep the price of premiums low. But spending will actually rise for many middle-class Americans.
One analysis found that the average deductible for someone who enrolls in a “Silver” plan is more than twice the deductible for employer-sponsored coverage. Deductibles for the lowest-cost “Bronze” plans (which cover only 60 percent of projected medical costs) average $5,150 for an individual and can be as high as $6,350 or $12,700 for a family of four.
So exchange insurance isn’t so great if you actually get sick.
Say you come down with a slipped disk in your back, and run up medical bills of $10,000 for imaging and doctor visits: You’ll be on the hook for at least $5,000 of that with a Bronze plan, on top of $3,000-plus for your premiums.
And you may have to pay the entire bill for any out-of-network care you choose — as well as for any medications. Typically, only 60 percent of drug costs are covered, and newer drugs are restricted by the plans in favor of mostly generic medicines.
It doesn’t get much better if you’re young, and presumably cheaper to insure. For a 30-year-old in New York state, the average minimum monthly premium for a “Silver” plan without subsidies is $337 ($266 for Bronze). This adds up to more than $4,000 a year. (Prices vary considerably by county.)
Consumers can get subsidies to help offset these costs. But based on my calculations, unless you’re earning less than about $60,000 for a family of four, or $30,000 for an individual, the subsidies are probably too low to offset the higher costs you’ll pay for Obamacare versus your prior coverage.
Obamacare’s most striking feat has been to simultaneously degrade the quality of private insurance, while also making the resulting health plans unaffordable. The plans are so costly that people need government subsidies just to afford the premiums.
Those who qualify for small subsidies or none at all are squeezed the hardest — forced to buy a costly plan with no help from the government.
A family of four earning $95,000 a year (a sliver too much for any subsidy) could spend close to 25 percent of its after-tax income on a “Silver” plan.
Obamacare will beat being uninsured for working-class Americans who qualify for the best subsidies. For many others, the president’s oft-repeated promise that Obamacare will trump your old coverage will just be another falsehood.
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