Five Ways Obamacare Is Failing Families

To pass their health care law, the president and congressional Democrats promised to lower premiums, promised that people would be able to keep their insurance and doctor, and promised that the law would not increase Washington’s deficits. We now know that these promises to Americans were made just to pass the law, and all have been broken. Rather than deal with any of the law’s problems this Congress, Senate Democrats ignored all attempts at bipartisanship while Americans struggled with the law’s alarming side effects. Senate Republicans have offered solutions that replace the president’s health care law with real reform that reverses Obamacare’s damage, increases consumer choice, and lowers health care costs.

Obamacare increases premiums

Democrats repeatedly promised their health care reform would reduce premiums for the average family by $2,500 per year. Contrary to these promises, health care costs grew significantly after the passage of Obamacare. Between 2009 and 2014, the average family premium for employer-sponsored coverage rose by nearly $3,500 – from $13,375 to $16,834 – even as deductibles and cost-sharing increased significantly as well. The percentage of workers whose insurance carries annual deductibles exceeding $1,000 has nearly doubled since 2009.

Source: Kaiser Family Foundation

The rising cost of coverage for families with employer-sponsored insurance pales in comparison to the rising cost of coverage in the individual insurance market. As key Obamacare mandates and regulations took effect, insurance premiums increased dramatically for millions of Americans in the individual market – up an average of 49 percent just last year. These increased premiums are for insurance that has higher deductibles and cost-sharing than before, and that is accepted by far fewer doctors and hospitals. CBO expects that Obamacare plans “will not be able to sustain provider payment rates that are as low or networks that are as narrow” in the future.

Many insurers have reported that enrollees appear far less healthy than they originally projected. For example, the chief actuary for Blue Cross and Blue Shield of North Carolina told the Wall Street Journal in a June 24 article: “It’s even worse than what we thought. We’re seeing more chronic conditions than we would have expected.” In July, the House Committee on Oversight and Government Reform released results from a survey showing that exchange risk pools are also significantly older than insurers anticipated, as insurers only enrolled about a third as many children under the age of 18 as they anticipated prior to the start of open enrollment.

In order to give insurers an incentive to offer exchange plans, Obamacare contained reinsurance and risk corridor programs to bail out the industry for losses they would otherwise face on exchange plans from 2014 to 2016. One industry CEO told the White House that the bailout protection reduced exchange premiums by as much as 20 percent. Unless the administration extends this bailout, premiums for exchange plans will increase substantially in coming years as premiums are forced to reflect the true costs of enrollee health care expenses.

Obamacare increases government spending, taxes, and deficits

Since President Obama was inaugurated in 2009, Washington’s debt has exploded by 67 percent – increasing from $10.6 trillion to a staggering $17.7 trillion. At a time when Congress should have been debating how to best reduce the budget deficit, the president and congressional Democrats decided to push through a massive new spending program. According to the most recent estimates, Obamacare’s new spending programs increase federal deficits by more than $1.8 trillion over the next decade.

In order to offset the deficit impact of this new spending, Obamacare increased taxes by more than $1 trillion and made large cuts to Medicare, particularly Medicare Advantage. Rather than pursue sensible Medicare reform to address the program’s looming shortfall, Obamacare haphazardly cut Medicare, using the projected savings to finance Obamacare’s new spending. Medicare trustee Charles Blahous projected in 2012 that Obamacare will increase the net federal budget deficit by between $346 billion and $527 billion by 2021.

Obamacare harms America’s health care system

Rather than pursing common sense reform of the troubled Medicaid program, Obamacare massively increased Medicaid without addressing any of its core problems. Numerous studies have found that Americans on Medicaid often receive far worse care than those with private insurance, and they often experience worse outcomes than people without insurance. Medicaid spending prior to the expansion was already crowding out other public priorities at both the state and federal level.

Obamacare’s perverse and heavy-handed regulations also wreak havoc on the individual insurance market by dramatically increasing premiums for younger and healthier Americans while creating incentives for people to remain uninsured until they get sick. Obamacare caused people to lose insurance and doctors that they liked. Evidence indicates that Obamacare is leading to provider consolidation, threatening competition in many parts of the country.

Obamacare reduces Americans’ freedom

By mandating that all insurance plans cover a prescribed set of benefits, Obamacare reduced Americans’ freedom to choose insurance products that works best for them and their families. Not only did Obamacare ban certain insurance plans, for first time in the nation’s history Washington penalized Americans for failing to purchase a product. Obamacare empowered the IRS as the primary enforcer of its many taxes and mandates. Moreover, in promulgating Obamacare rules, the administration tried to force people to violate their conscience by paying for health care services that they find morally objectionable.

Obamacare hurts the economy

It has become clear that Obamacare is at least partly responsible for the economic stagnation of the last several years, as businesses and workers struggle with the law’s costly mandates. According to several surveys conducted by the Federal Reserve in August, Obamacare is causing businesses to hire less, move workers to part-time status, lower wages, and raise prices. A recent economic analysis of small businesses found that Obamacare has already lowered employment by 350,000 workers at these companies and reduced workers’ annual wages by nearly $1,000. Earlier this year, CBO projected that Obamacare will lead to 2.5 million fewer workers within a decade. One economist recently estimated that Obamacare will lower employment and hours worked by three percent, and worker income and national GDP by two percent. This translates into more than $2 trillion in lost wages between 2017 and 2024.

The Republican alternative

During the debate over Obamacare, Republicans offered numerous ideas to improve health insurance markets and to reduce health care costs. Democrats, with large majorities in both houses of Congress, rejected any compromise and chose to implement their Washington-centric approach. Republicans are ready to replace Obamacare with common sense reforms that make healthcare accessible, expand choice and lower costs.

Real reform would:

• Increase personal control. People would be in charge of their own health care decisions, not government bureaucrats. Americans should be free to purchase insurance tailored to their families’ needs, rather than a one-size-fits-all plan dictated by Washington.
• Increase freedom. Obamacare’s onerous mandates, including the individual mandate and employer mandate, should be repealed. The law’s unfair taxes also need to be repealed and the IRS should no longer be involved with people’s health care decisions.
• Increase private competition. Insurers would compete for private dollars and not for government subsidies. Competition through insurance markets should be expanded and people should be allowed to shop across state lines.
• Increase protections. Protect people who get sick from losing their insurance and ensure the guaranteed renewability of insurance.
• Increase savings. Address the hundreds of billions of dollars in waste, fraud, and abuse.

Democrats are trying to uphold a law that isn’t working. It isn’t working for women; it isn’t working for young people; and it isn’t working for families. It’s not working for our economy, and it’s damaging America’s health care system. Congress must stop the pain the law is currently inflicting, then take steps to help all Americans get the care they need, from the doctor they want, at a lower cost.