The nine most dreadful words in the English language are, We’re from the government, and we’re here to help. The Affordable Care Act has proven this time and again since the very beginning. Every promise made to promote this program has turned out to be a lie. Politifact declared Barack Obama’s pledge, “If you like your plan, you can keep your plan” to be the Lie of the Year for 2013.
The president’s parallel promise, “If you like your doctor, you can keep your doctor” turned out to be equally untrue for millions of Obamacare exchange consumers who found access to providers so limited that they had no option to return to their previous clinics. Ditto for Obama’s assurance that the average family of four would pay $2,500 less per year in premiums.
Now, as The New York Times reported this weekend, even the words “affordable” and “care” have turned out to be untrue as well. The sharp rise in premiums has garnered the most headlines in the first three open-enrollment seasons of Obamacare, but equally if not more pernicious has been the increase in deductibles. As Eric Pianin explained for The Fiscal Times on Monday, deductibles have increased an average of 11 percent on Bronze level plans for 2016, intended to be the most affordable of all options, and now average over $5700. For Silver level, deductibles rose 6 percent and now average over $3100.
When the media focused on skyrocketing premiums (rightly so, considering the large serial increases for health insurance on the individual exchanges since the introduction of the Affordable Care Act) its advocates defended the system by pointing out that many on the exchanges qualified for subsidies to absorb the costs. For instance, Obama himself promised, “Most Americans will find an option that costs less than $75 a month,” and HHS Secretary Sylvia Burwell claimed that 80 percent of Americans would pay no more than $100 in premiums after the subsidies.
Those claims may be true, but those subsidies don’t just fall out of the trees; they come from higher taxes on providers and manufacturers, and eventually out of the pockets of consumers, as do all business taxes. However, that defense doesn’t work on deductibles, which insurance companies were forced to raise when the state and federal governments tried to squeeze premium increases for the exploding demand down to a dull roar.
Subsidies do not mitigate the fact that consumers have to pay both the premium and then thousands of dollars for care out of their own pocket before insurance takes effect, except in rare and catastrophic circumstances.
Consumers have become victims of a bait-and-switch scheme that the government would vigorously prosecute – if it wasn’t masterminding the scheme itself.
Consumers used to have an option for that kind of health insurance – catastrophic coverage, used to indemnify against unforeseen major health events. Those policies featured low premiums and left routine care for consumers to negotiate directly with providers on a cash basis. Combined with health-savings accounts (HSAs), those plans offered a rational approach to balancing health and economic requirements, especially for younger consumers who rarely need more than one or two clinic visits a year, which would cost far less than either comprehensive-coverage premiums or deductibles even in the pre-ACA era.
Instead of “affordable care” promised by President Obama and Democrats, consumers have instead discovered they have effectively been forced to pay for catastrophic health insurance at comprehensive-plan prices. They have become victims of a bait-and-switch scheme that the government would vigorously prosecute – if it wasn’t masterminding the scheme itself. The consumers interviewed by Robert Pear in The New York Times figured out that they’ve been had.
“Basically I was paying for insurance I could not afford to use,” said one Texas man who decided to drop his coverage. Another 60-year-old New Jersey man told Pear, “We have insurance, but can’t afford to use it,” thanks to a $3,000 deductible on top of his premiums. One woman told Pear that she’d be better off saving the money from her premiums as a form of self-insurance against catastrophe – since Obamacare no longer allows for low-premium catastrophic coverage in most cases.
Small wonder, then, that Gallup found disapproval for Obamacare rising again as open enrollment began. The most telling metric in Gallup’s poll comes when approval gets broken out by insurance type, when aggregated between its 2014 and 2015 surveys. The law is most popular among those enrolled on Medicaid or Medicare, with a 44/50 approval rating. That drops to 41/56 for those with private insurance. The uninsured – for whom the ACA was ostensibly enacted – Obamacare’s approval rating plummets to 30/59.
Expect that demographic to grow over the next few years, whether it results in fines or not. People will not pay $1200 a year just to pay another $5000 before they see the first benefit from their insurance. And as premiums and deductibles continue to increase, expect more Americans to realize they’ve been had by those who claimed to be here to help.