Issues & Insights
Obamacare by Nick Youngson CC BY-SA 3.0 Alpha Stock Images

Fact Check: Obamacare Failed

Eight Years In, Obamacare Premiums Have Tripled

How can we measure the success or failure of Obamacare? Let’s focus on the two most important measures: costs and access. My analysis shows two failures. Let’s look at the facts.

Little known is that Obamacare plans have increased in cost of nearly 200%. While increases have stabilized more recently, increases in the early years of Obamacare ranged from 8% to 37% per year:

Astoundingly, the average increase from 2013 to 2021 was 172%, meaning if a plan cost $10,000 in 2013 it would cost $27,200 just 8 years later!

Why is this not widely known?

One reason is that many writers did not want this failure to be noticed, so they didn’t “kick the tires” of the marketplace rates. Analysis often lacked any context for what the numbers meant.

Instead, writers overwhelmed readers with data in sentences rather than in a clear table like that nearby; introduced a myriad of other confusing data points, such as premiums by plan type (a.k.a., the metallic levels); implied the increases weren’t that high, like not being clear what was being calculated (for instance, a 172% increase reflects premiums that are 272% of the original cost, while a 172% increase could imply the increase is “only” 72%); showed results for just one year rather than Obamacare-to-date – a “divide and conquer” approach; and implied that premium increases wouldn’t be felt because of subsidies (true, but subsidies merely shift cost and obfuscate the real cost of the program).

Underreported was that 90% of those on Obamacare received subsidies to buy coverage, anywhere from 1% to 100% of the premium. In other words, while the annual premium could be $27,700, if a family were to be charged merely $5,000 after subsidy (the subsidy averaged 80% of the premiums in 2022), would the increase in premium even be noticed? Also, the more the premiums increased, the more the subsidy increased. No wonder people didn’t know what Obamacare actually cost!

Obamacare Enrollment Under 10%

Fewer than 15 million people enrolled in the Obamacare marketplace in 2022. This figure is the highest annual enrollment ever in Obamacare. However, the Congressional Budget Office (CBO) originally projected 25 million would enroll. As with most projections, reality can be quite different than rosy projections.

By comparison, 20 million people newly enrolled in Medicaid due to the expansion under Obamacare. So, 60% of the new enrollments (20 million out of 35 million) were due to Medicaid enrollments, which could have been accomplished by merely lowering the requirements to enroll. So, passage of Obamacare was unnecessary just to get people to enroll in Medicaid.

To put these figures into proper context, the number of uninsured individuals prior to Obamacare was 44 million people, and is now 29 million, a 34% decrease.

Conclusion

Some have been trying to figure out what’s wrong with Obamacare and have concluded that:

  • premiums are very high,
  • insurers lost money,
  • insurers left the market,
  • there are still 29 million uninsured.

All legitimate issues, but they counter with:

  • premiums have always been high,
  • insurers make too much money,
  • insurers left the market, so the government should step in,
  • there are still 29 million uninsured, so we need to go further.

The bottom line is that Obamacare cost increases have been astronomical and underreported. Those increases have been mitigated by subsidies, but at great expense (also underreported). Finally, Obamacare’s complexity was unnecessary as 60% of the increase in the number of people covered was due to Medicaid expansion, which could have been accomplished without Obamacare.

That Obamacare could pass and be touted as a success because some people now have coverage is appalling.  At what cost? A 172% increase in cost, when healthcare costs in the rest of the market increased just 24% (based on medical CPI)?

How could Obamacare have been passed given these cost increases? This quote suggests an answer: “Lack of transparency is a huge political advantage, and basically call it the stupidity of the American voter or whatever, but basically that was really, really critical to getting the thing to pass.” – Jonathan Gruber, ACA architect, 2013

Rich Yurkowitz is a health care actuary and author of Medicare For All – Really?!

We Could Use Your Help

Issues & Insights was founded by seasoned journalists of the IBD Editorials page. Our mission is to provide timely, fact-based reporting and deeply informed analysis on the news of the day -- without fear or favor.

We’re doing this on a voluntary basis because we believe in a free press, and because we aren't afraid to tell the truth, even if it means being targeted by the left. Revenue from ads on the site help, but your support will truly make a difference in keeping our mission going. If you like what you see, feel free to visit our Donations Page by clicking here. And be sure to tell your friends!

You can also subscribe to I&I: It's free!

Just enter your email address below to get started.

Share

6 comments

  • High quality doctors are finding that they don’t need to work with insurers at all. More and more, doctors are saying your health is between them and you and your insurance is between you and your insurer. The rest of them work for a hospital chain and will accept lower wages to not have to absorb all the insurance overhead.

  • Lets not forget that while we got Obamacare due to the ‘stupidity’ of the American voter and Democrat politicians, it was John McCain that ensured it would remain the law under Trump. His deathbed vote was in favor of keeping Obamacare. He chose to spite Trump and hurt the American people as a result. For all of the years Obama was in office Republicans (including McCain) voting to reverse Obamacare, as soon as Trump’s presidency made it actually possible he stuck it to us all.

  • The goal of mandated health insurance is wrong. The goal should be the health of the patient. We should be asking if mandated insurance is the best means to good health.

About Issues & Insights

Issues & Insights is run by the seasoned journalists behind the legendary IBD Editorials page. Our goal is to bring our decades of combined journalism experience to help readers understand the top issues of the day. We’re doing this on a voluntary basis, because we believe the nation needs the kind of cogent, rational, data-driven, fact-based commentary that we can provide. 

We Could Use Your Help

Help us fight for honesty in journalism and against the tyranny of the left. Issues & Insights is published by the editors of what once was Investor's Business Daily's award-winning opinion pages. If you like what you see, leave a donation by clicking on donate button above. You can also set up regular donations if you like. Ad revenue helps, but your support will truly make a difference. (Please note that we are not set up as a charitable organization, so donations aren't tax deductible.) Thank you!
Share
%d bloggers like this: