Obamacare Is Experiencing Multi-Organ Failure

By Dr. Robert Moffit, Health Care Policy Expert at the Heritage Foundation

President Barack Obama’s speech Thursday will likely highlight the “successes” of Obamacare, but this complex health law—with interlocking parts—is really becoming more like a patient suffering from multi-organ failure.

This year’s feverish health insurance premiums are unlikely to abate. For 2017, the premiums on Obamacare’s individual market are projected to increase by 25 percent on average.

Central planning is the disease.

It starts with the costly health insurance benefit mandates that the law requires of plans sold on the Obamacare exchanges. Those can only be sustained through a heavy dose of taxpayer subsidies for enrollees. For lower-income customers, the federal subsidies only mask the symptoms of the dramatic cost increases.

Meanwhile, the federal subsidy system is so poorly designed that in 2015 half of the lower-income people receiving subsidies ended up owing the government money. At the same time, health insurance deductibles skyrocketed. Still, there is a mandate to buy the federally approved insurance.

Yet, the individual mandate tax penalty—riddled with exceptions—is less than the cost of the insurance itself, rendering it ineffective; and an ugly business to enforce. From the inception of the enrollment in 2014, it was estimated thatabout 90 percent of those remaining uninsured would not be forced to pay a penalty. The result is that the Obamacare exchanges have disproportionately enrolled those who are older, sicker, and poorer.

Why? Because millions of younger, healthier people don’t see a benefit in enrolling. This “adverse selection” ends in even higher costs for insurers. Unable to sustain the losses, more insurers withdraw, further reducing exchange competition and enrollee choice.

Beyond big deductibles to make their higher premiums more “affordable,” insurers have narrowed the networks of doctors and hospitals covered by their plans, making enrollees’ access to care progressively more difficult and resulting in consumers having fewer doctors and hospitals to choose from. A new McKinsey & Co. analysis of insurance plan filings for 18 states shows that 75 percent of the offering on the 2017 exchanges will be HMOs with narrow networks.

And, faced with bigger losses on the increasingly dysfunctional exchanges, insurers beg Congress for bailouts—all funded on the backs of federal taxpayers.

The administration is hoping that exchange enrollment will increase. The Obamacare exchanges are not quite in cardiac arrest, but the vital signs show it heading there: less choice, less competition, higher premiums, and more substantial deductibles.

Independent analysts, such as Standard & Poor’s, are projecting a modest growth (possibly even a decline) in enrollment. The administration officials and their allies are pondering the same old quack remedies—a big IV drip of  taxpayer subsidies and even more coercive regulation.

As we head into Obamacare’s open enrollment season for 2017, Congress needs a health policy cure, not more short-term bailouts to insurers. Congress must systematically repeal and replace the law’s damaging provisions with competently crafted statutory alternatives. Bailouts just perpetuate the suffering.

*Originally published in the Daily Signal, click here.

View Article

Obamacare’s sunk: Time for a new ship

By Jim DeMint, President of The Heritage Foundation Back in 2010, Obamacare was like the…

Stopping Another Obamacare Bailout

Special Guest Blog: Senator Mike Lee (R-UT) When President Barack Obama made his case to…

Video: What Pro-Growth Tax Reform and Conservative Health Care Reform Should Look Like

https://www.youtube.com/watch?v=b9ev9fB2UU0 Watch Heritage Foundation scholars Paul Winfree and Ed Haislmaier, along with CEO of Juniper…

Video: What Pro-Growth Tax Reform and Conservative Health Care Reform Should Look Like

https://www.youtube.com/watch?v=b9ev9fB2UU0 Watch Heritage Foundation scholars Paul Winfree and Ed Haislmaier, along with CEO of Juniper Research Group Chris Jacobs, discuss the impact that an outdated tax code and a broken  health care system has on those in the business community, the health care community, and the country as a whole.…


Obamacare Bailout Declared Illegal

Last week, an Obamacare bailout for health insurance companies was declared illegal by the nonpartisan Government Accountability Office (GAO). This is now the second time the Obamacare bailout has been dubbed illegal. Back in May, U.S. District Court Judge Rosemary Collyer ruled in U.S. House of Representatives v. Burwell that…


How Bailing Out Health Insurers Creates Single-Payer Health Care

By Chris Jacobs, CEO of Juniper Research Group The bad news for Obamacare keeps on coming. Major health carriers are leaving insurance exchanges, and other insurance co-operatives the law created continue to fail, leaving tens of thousands without health coverage. Those on exchanges who somehow manage to hold on to their…


Grand Theft Health Insurance

By Edmund Haislmaier, Heritage Foundation Health Care Policy Expert Recently, the national Blue Cross and Blue Shield Association has been aggressively lobbying Congress to ignore the Obama administration’s illegal diversion of tax dollars into the pockets of—you guessed it—health insurers. At issue is funding for the “transitional reinsurance” program in…


Congress Should Stop All Obamacare Bailouts

Last Monday, Aetna Inc. announced it would stop selling health insurance on the vast majority of Obamacare state exchanges throughout the country. Aetna now joins a growing list of some of the largest insurance companies in the country who are losing money insuring high-cost consumers and are pulling out of…


This Bill Would Stop the Obama Administration From Prioritizing Insurance Companies over Taxpayers

In order to convince health insurance companies to participate in the financially risky Obamacare exchanges, three health insurance bailout provisions were written into Obamacare including risk corridors, reinsurance, and cost-sharing subsidies. These bailout provisions were meant to compensate health insurance companies for losses sustained while participating in Obamacare. The reinsurance…


About Sentinel Doctors

Sentinel Doctors are conservative physicians who believe that repealing Obamacare and reducing the role of the federal government in health care will empower doctors, expand consumer choice, lower costs, and restore and improve the doctor-patient relationship. That’s why Heritage Action for America created the Sentinel Doctors program. To provide a…

Sign Up
Sign Up