If any elected member of Congress wants make America great again, start by unshackling my generation from the costly chains of Obamacare.
By Justin York
Readers of the Central Florida Post already have a healthy skepticism about the mainstream media. Now, they should lean on it more than ever when it comes to the Senate’s Obamacare repeal proposal formally known as the Better Care Reconciliation Act.
This proposal (in addition to the House’s American Health Care Act) represents the first step of Congressional Republicans’ 3 Step Plan to actually repealing and replacing Obamacare. Therefore, Congress should get to work and repeal it. Now.
The Patient Protection and Affordable Care Act (“Obamacare”) promised to deliver more health benefits at a lower cost to more people all while saving taxpayer money. It is undeniable that a sliver of the population has benefitted from the law. However, for many, the law has failed to meet expectations set by Democratic lawmakers in 2010. Instead, Obamacare has resulted in skyrocketing premiums and deductibles and diminished access to care for many.
Obamacare establishes “essential health benefits (EHBs)” that health insurance plans must generally cover with few exceptions. These include ambulatory patient services, emergency services, inpatient hospitalization, maternity and newborn care, mental health and substance abuse treatment, prescription drug coverage, rehabilitative services, laboratory services, preventative and wellness serves, and pediatric services. These EHBs had to be covered in most health insurance plans beginning in January 2014.
It is a mathematical certainty that when you purchase any plan with more benefits, a higher premium will be charged. In the event you receive a subsidy, that subsidy merely means that the taxpayer is covering some portion of that higher premium. Either way, more benefits means more costs. Consequently, pre-Obamacare plans could not offer existing premiums while covering additional mandated EHBs. Therefore, they would have to be canceled in 2014. I know because I experienced it.
In 2012, I purchased an individual insurance plan (Hospital Surgical Plus) from BlueCross BlueShield of Florida. My monthly premium was $113. My in-network deductible was $250; out-of-network, my deductible was $750. My individual out-of-pocket maximum was $2,500 in-network; $5,000 out-of-network. As a law student at the time this plan provided affordable, decent coverage that suited my individual needs.
On June 26, 2013, I received a notice from BlueCross BlueShield that my premium was increasing to $138 per month because of “rising medical costs” generally, as well as “the increasing age of the individuals covered by your plan.” Then on October 28, 2013, I received an infamous Obamacare cancellation notice. My insurer told me that my affordable plan would no longer be offered as of summer 2014—right when the EHBs were being mandated in all individual insurance plans. Fortunately, I had employer-coverage by that point which kept my monthly premium contribution at about $100 per month for similar coverage.
The kicker came when I went to add my wife to my plan. To add her to my employer-plan through United Healthcare (HRA 2500 Choice Plus Plan) was an extra $600 per month in premiums. That’s right. For two healthy adults under the age of 30 to buy Obamacare-compliant health insurance, we had to pay over $700 out-of-pocket every month. Moreover, even though we are paying this substantial sum every month, our deductible is still $5,000 in-network; $6,000 out-of-network.
Why not resort to the individual market exchanges you might ask? Even though my wife was a law student herself until 2016, my pre-tax income as an associate attorney was considered in calculating the federal subsidies she would be entitled to and what her premiums and deductibles would look like if she bought a plan on the individual market. The premium and deductible for Obamacare-individual market plans were substantially more expensive for my wife than my employer’s provided coverage and there was no subsidy that could shield us from the expense.
The point is that while most health insurance plans may have mandated more benefits, the costs are staggering, as my family has experienced. Moreover, we are not alone. As Speaker Paul Ryan explained this January, the following states will see astonishing premium increases in 2017 as part of an alarming national trend.
North Carolina : 40 percent
Illinois : 43 percent
Nebraska : 51 percent
Pennsylvania : 53 percent
Tennessee : 63 percent
Oklahoma : 69 percent
Arizona : 116 percent
As Politifact noted, “The calculation is based on the average cost in each county for the second-lowest-cost silver level plan for a 27-year-old, a plan widely used as a benchmark to compare rates between years and geographic areas.”
Obamacare defenders will argue that these increases are not felt by insureds because the subsidies remain keyed to their income and therefore they will not have to cover the increased out of pocket. However, not all consumers in the individual market will receive subsidies (to the tune of 20% of individual market consumers) and therefore many consumers will indeed bear the brunt of these massive premium spikes. And the subsidies Obamacare defenders will blithely waive to are funded with taxpayer money at a time when we are already incurring chronic annual deficits and approaching $20 trillion in debt as a nation.
Moreover, insurers continue to pull out of states as they have been for years (well before Donald Trump was elected). Added benefits—even at higher costs—are of use to no one in the individual markets continue on their present trajectory towards collapse.
Obamacare has not saved taxpayer money as can be seen in an explosion in Medicaid enrollment far beyond what the CBO predicted in 2010. As many of you know, Medicaid provides health care to low-income Americans. Medicaid is a joint federal and state program; administered by states; and in turn financed by both the states and the federal government.
Under Obamacare, the federal government will reimburse 100% of state spending on Medicaid expansion enrollees—non-disabled, working-age adults with income between the state’s previous eligibility thresholds and 138% of the federal poverty level ($16,394 in 2016). After 2016, the federal share gradually phases down until 2020 when it reaches 90%, where it is scheduled to remain indefinitely. States have the option to opt out of the Medicaid expansion as Florida has (wisely) done. In fact, most of the newly insured (about 14.5 million) since Obamacare was passed have been enrolled in Medicaid or CHIP.
As of April 2017, over 74.5 million Americans were enrolled in Medicaid. Total 2016 Medicaid spending by the states and federal government exceeded $574 billion. To boot, substantial funds are being expended on a program that accordingly to a recent study had “no significant effects” on a series of health outcomes. Worse, the Wall Street Journal reported on a government report describing an explosion of improper Medicaid spending between 2013 and 2016. Improper payments increased from $26 billion in 2013 to $67 billion in 2016. Noticeably, this ballooning in waste occurred at the same time the Medicaid expansion was taking effect. And the subject report was taken down from the Department of Health and Human Services website since the Journal report. Now, with Obamacare, we are spending more money on a program intended to help the needy producing subpar outcomes with no reforms.
Much has been made of the CBO’s finding that under the Better Care Act 22 million more Americans will be uninsured by 2026 than under current law. First, while I agree it is important to have a scorekeeper in budgetary matters, we can disagree of methodology. Second, delving into the CBO analysis, 15 million of these lost insureds are individuals who are voluntarily opting out of the insurance market due to the repeal of the individual mandate. This about the same number of individuals who enrolled in the individual health insurance marketplace (12.7 million) as of 2016. In other words, the CBO has found that Americans forced into the individual insurance market will likely leave the market when they are not forced to stay in by the individual mandate. Surprised? Furthermore, as the GOP implements steps 2 and 3 of the overall Obamacare repeal process, these individuals can be offered affordable plans in repaired, competitive, interstate individual insurance markets. Passing the AHCA/BCA to curb out-of-control Medicaid spending is merely just part of step 1.
Also, I believe the CBO’s findings should be read with a little humility due to the difficult of projecting the future of health care. Health care is a complex subject. Frankly, the CBO has had to revise its own projections on Medicaid expansion. This demonstrates both the increasing cost burden of Medicaid as well as the hazards of projecting the state of health care markets far into the future.
Below are the CBO projections of the ACA Medicaid Expansion Enrollment from 2015 to 2025. Notice that from 2010 to 2016, the CBO has had to adjust its projected enrollment every year. In 2016, the adjustment was substantial.
Now, let’s look at the CBO’s projections of Medicaid expansion spending. Similarly, notice that from 2010 to 2016, the CBO has had to adjust its projected Medicaid expansion spending every year. In 2016, the adjustment was substantial. In short, the GOP proposals will overtime restore Medicaid to pre-Obamacare levels. Hopefully, this will be a staging ground for future reforms to Medicaid.
Finally, what has not been mentioned thus far is the avalanche of taxes levied under Obamacare: the individual mandate excise tax; the employer mandate tax; the surtax on investment income; the excise tax on comprehensive health insurance plans (the “Cadillac tax”); the HSA withdrawal tax hike; the tax on medical device manufacturers; and many more.
The GOP proposals address many of the issues outlined above. Insurance companies are required to accept people with pre-existing medical conditions. States are permitted to allow insurance companies in their states to sell customizable plans with all of the EHBs or some of the EHBs but not others. This way, individuals will not be forced to pay for benefits they neither want nor need. This will also bring down premiums over time for those seeking customized plans without benefits they do not want or need. The CBO acknowledges that enacting the BCA will eventually lead to lower premiums by 2020. In the individual market, premiums may fall by as much as 30%. The proposals also eliminate the individual and employer mandate and a raft of taxes imposed on individuals and businesses by Obamacare. The CBO report also indicates that these proposals would overtime reduce the federal deficit which is certainly welcome news.
In closing, I take particular umbrage at those who claim to want the young to thrive in America yet burden them with staggeringly expensive health insurance. If any elected member of Congress wants make America great again, start by unshackling my generation from the costly chains of Obamacare. Repeal Obamacare. Now.
Justin K. York is an attorney with Lydecker | Diaz in Orlando. He is also a longtime Seminole County resident and conservative Republican activist. He has chaired the UCF College Republicans and the Florida Federation of College Republicans. He also headed the student and youth coalitions in Florida for both the John McCain and Mitt Romney presidential campaigns. He currently serves as Secretary of the Seminole County Republican Party and a member of the Lake Mary Planning and Zoning Board. Recently, Justin was elected without opposition to the Seminole County Soil and Water Conservation District as a District Supervisor.
