Obamacare: Costs Go Up, Insurers Drop Out and Consumers Get Screwed

Obamacare: Costs Go Up, Insurers Drop Out and Consumers Get Screwed


Remember the now-infamous promise made by President Barack Obama when pushing the Affordable Care Act, better known as Obamacare? “If you like your plan,” the president repeated on dozens of occasions, “you can keep your plan.”

When millions of Americans got thrown off of their existing health-insurance plans in the fall of 2013, PolitiFact called it the Lie of the Year. Obama ended up apologizing for the lie in an interview with NBC News’ Chuck Todd in November 2013, even if he couldn’t quite bring himself to admit that it was a lie. “We weren’t as clear as we needed to be in terms of the changes that were taking place,” was as far as Obama’s contrition went.         

Related: Get Ready for Huge Obamacare Premium Hikes in 2017

Almost three years later, there is little evidence of any more contrition on that failure, or others in Obamacare for that matter. Earlier this week , Charlie Rose interviewed three former Obama speechwriters on a variety of topics. After discussing their work on lighter-topic speeches, Rose asked whether they felt they had an impact on Obama’s more serious addresses. Jon Lovett replied that he felt most proud of his impact on “the most serious speeches – health care, economic speeches.”

That prompted his colleague, Jon Favreau, to interject. “Lovett wrote the line about ‘if you like your insurance, you can keep it,” he said, as the panel erupted in laughter. “How dare you!” Lovett shot back in mock indignation. “And you know what?” he asked as the laughter continued. “It’s still true … no.”

Are incompetence and deceit humorous? Perhaps in the Obama administration, the answer might be yes. For the rest of us, especially those who find themselves stuck between a federal tax mandate and an insurance market that has narrowed as significantly as its costs have skyrocketed, no is the correct answer.

In fact, those two dynamics continue to this day, despite promises that the ACA markets would stabilize after the first two or three years and would eventually “bend the cost curve downward.” Consumers have their plans cut out from underneath them each year as insurers have either pared back plans or exited exchanges altogether as Obamacare’s economic model continues to fail. At the same time, premiums and deductibles have continued to skyrocket, and tax subsidies cannot hide the impact on families.

What was promised as more “choice” is becoming fewer choices as UnitedHealthcare and now Humana begin to pull out of certain regions. An AP story in 2014 reported that of the 19 nationally recognized cancer centers that responded to a survey, only 4 reported access through all Obamacare insurers. Last month, Blue Cross Blue Shield released a report warning that costs under the president’s plan are unsustainable – fully 22 percent higher than people covered by employers. And The Hill reported that Obamacare insurers lost money in 41 states in 2014, which could determine whether big companies like Aetna stick with it.

Related: Obamacare Is Wide Open to Fraud – and They’re Not Going to Fix It

As the fourth year of Obamacare approaches, Politico’s Paul Demko reports that consumers can expect more of the same price hikes and narrowed choices as they have seen the first three years. The Obama administration insists that prices only rose eight percent for 2016 over the previous year – even though that itself is still more than three times the rate of inflation, and ignores states like Minnesota where the average premium increase was over 30 percent.

“There are reasons to think the next round may be different,” Demko warns. He quotes a Deloitte executive who agrees. “A number of carriers need double-digit increases” for 2017. Those price increases will hit the Obamacare exchanges on November 1st, one week before voters elect a new President and Congress.

Kaiser Health News reports that 2017, far from being the year that stabilizes the Obamacare exchanges, will be another “adjustment year” for the risk pools. Even the director of Covered California expects to see higher rate increases in the fourth year of Obamacare than previously seen, although Peter Lee shrugs off the risk for his own exchange. “There are a number of reasons 2017 will have higher rate increases than the last few years,” Lee tells KHN. “But we believe in California we won’t see the significant headwinds many other states are experiencing.” However, Lee would not answer when KHN asked if UnitedHealth Group had applied to participate in Covered California for 2017.

Related: More Bad News for the Remaining Obamacare Co-ops

This brings us back to the ability to keep one’s plan. UnitedHealth has made clear its intentions to exit most of the state Obamacare markets next year, and California may well be one of them. A more troubling exit looms on the horizon – the exit of all insurers from the lowest-cost bronze plans.

One BlueCross BlueShield subsidiary in Virginia has already filed plans to get out of the bronze plan, according to Inside Health Policy, and other insurers will follow suit if BCBS succeeds. That will destabilize the markets further, as one analyst told Leslie Small at Fierce Health Payer, because most of the younger and healthier participants in these risk pools have chosen bronze plans – and would likely bail out rather than pay higher premiums for insurance that they hardly ever use. However, that will force others who wish to comply with the mandate to once again lose their plans, and force them into finding other, more expensive coverage.

In other words, if consumers like their third different plan in three years, many of them won’t be able to keep that one, either. Needless to say, they won’t be laughing. Perhaps they will be voting instead.