Background: Passed back in 2010, Obamacare gave the federal government unprecedented control over the health insurance industry. Obamacare took control away from patients, doctors, and health insurance companies and gave it to government officials. The federal government now has the authority to force individuals to buy health insurance, force employers to provide health insurance, and regulate what kind of health insurance patients are allowed to buy.
While the stated goal of Obamacare is to make healthcare more affordable and more abundant, the outcome has been far different. President Obama’s healthcare law has caused millions to lose their plans and doctors, limited consumer choice, reduced competition, failed to lower the growing cost of health care insurance and increased taxes. Obamacare represents a significant step toward a single-payer, government-run healthcare system.
Constrained Choice: Under Obamacare, the individual and employer mandates effectively force every American citizen to purchase government-approved health insurance or face a tax penalty. The tax penalty for not having insurance is $695 per adult or 2.5% of household income, whichever is greater. Businesses with 50 or more full-time employees must provide health insurance to their workers or pay a fine of $2,000-$3,000 per employee.
Also under Obamacare, all individual and small group health insurance plans must cover “essential health benefits” mandated by the federal government. This stifles insurance innovation, deprives patients of choice and increases the cost of coverage for millions of Americans. Purchasing health insurance is a very good thing for most Americans, but it is not the proper role of government to force individuals to do so and then mandate what kind of product is legal.
Reduced Competition: Due to a number of reasons including government enforced price controls, the standardization of insurance plans, increased regulation, and being forced to insure patients regardless of medical history, health insurance companies on the exchanges are finding it nearly impossible to make a profit. The number of Obamacare exchange-participating insures in 2016 is 287. That is 108 fewer than the 395 insurers that offered individual-market coverage in the 50 states and the District of Columbia in 2013, just prior to Obamacare taking effect. This trend is only continuing as more and more insures are losing money and leaving the exchanges.
Rising Healthcare Costs: While campaigning for president, candidate Obama promised to enact healthcare reform that would lower a typical family’s health insurance premium by up to $2,500 a year. Instead, under Obamacare, premiums skyrocketed for those receiving health insurance on the individual market and those receiving insurance from an employer. According to one study, average 2016 health insurance premiums on the individual market are rising in nearly every state, 17 of which face premium increases of 20 percent or more. According to another report, by the Congressional Budget Office (CBO), average premiums for employment-based coverage will increase by 60 percent over the next 10 years.
Increased Taxes: Contained within Obamacare is a trillion-dollar tax hike on employers and families. This includes a roughly 2.5% excise tax through 2017 on health insurance premiums that exclusively hurts small businesses since large firms self-insure and do not pay health insurance premiums; a 2.3% tax on medical device manufactures; a “Cadillac tax” on high-cost plans; a 0.9% increase in the Medicare payroll tax; and a new 3.8% Medicare surtax on unearned income (capital gains and dividends). Additionally, over $1.5 billion in taxpayer dollars have been wasted on 16 failed Obamacare created health insurance co-ops.
Solution: Obamacare has been nothing short of a disaster. The President’s healthcare law has restricted consumer choice, reduced insurer competition, increased insurance premiums, raised taxes and caused millions of Americans to lose their doctors and their health care plans. Due to lackluster enrollment levels, expensive and rising premiums, and decreasing insurer participation, the Obamacare exchanges may soon collapse. Rather than use this opportunity to save Obamacare by bailing out insurance companies, creating a government-run health plan, or transitioning to a single-payer system, Congress must fully repeal Obamacare and enact patient-centered health care reform that lowers costs and expands consumer choice.