The Unaffordable Care Act

It shouldn’t be a shock that Obamacare premiums are going through the roof.

Are people really surprised that benchmark health plans under the Affordable Care Act exchanges will increase by an average of 25 percent next year? If so, they probably also didn’t get the joke when Captain Renault in Casablanca said he was “shocked, shocked” that gambling was occurring at Rick’s Café … just before he was handed a fistful of his winnings.

From the get-go, economists like those at Dallas’ National Center for Policy Analysis, warned that, despite assurances by the Obama Administration to the contrary, Obamacare was bound to increase healthcare costs, not curb them. Shortly after the law was passed in 2009 and 2010 — without a single Republican vote — the NCPA’s then-CEO, John Goodman, predicted that ACA costs would explode. Three years later, the think tank’s Peter Ferrara confirmed Goodman’s analysis, citing the obvious result of new taxes, less supply, and more demand.

Earlier this year, Texas was hit hard when several insurance companies yanked their participation in the state’s exchanges. Aetna, UnitedHealthcare, Scott and White Health Plan, and Oscar Health all said their costs and losses in the program had been unsustainable. Aetna said it had $450 million in losses in 2014. UnitedHealthcare watched $650 million go spinning down the drain. Mario Schlosser, CEO of Oscar Health, which had about 7,000 insureds in North Texas, told the Star-Telegram that Obamacare uncertainties had made it “challenging for us to operate effectively and continue to deliver access to quality healthcare.”

President Barack Obama says the ACA has been suffering some “growing pains.” But the pains have left many Texans in the lurch, especially those in rural areas. Rural residents had fewer Obamacare options to start with. Now they’ll have even fewer — and higher premiums to boot. Sure, about 85 percent will continue getting federal subsidies to offset their costs under the law. But in a country where the national debt is $19 trillion and counting, that’s not exactly good news.

Again, none of this should be shocking. In a July blog post, Devon Herrick, a senior fellow at the NCPA, wrote: “The nonprofit Blue Cross Blue Shield Association found that Obamacare enrollees are about 22 percent costlier than people covered through employer plans. Indeed, the consulting firm McKinsey & Co. found insurers lost money on individual insurance in more than 80 percent of the state marketplaces in 2014—the first year Obamacare exchanges were open.”

The big picture for Texans is that, on the plus side, the ACA has reduced the number of its citizens without health insurance, from 25 percent to about 17 percent. But here, as elsewhere, the care required by those newly insured has been a lot more expensive than carriers were counting on. And, not enough healthy young people have enrolled to make up the difference.

No doubt, something’s gotta give with the president’s “signature achievement.” Unless Obamacare is scrapped or tampered with — some wonder whether the latter’s even possible — there’s likely to be pressure from the left next year to make healthcare coverage another big, fat, unfunded, socialistic liability. Which may have been the plan all along.

Growing pains, my eye.


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