The following column (by me) originally appeared at the MacIver Institute.
The mainstream media seems fixated on the insider politics surrounding repealing and replacing Obamacare, but the average person couldn’t care less about parliamentary procedures and intra-party squabbling. They’re faced with an inescapable reality: healthcare is unaffordable and inaccessible thanks to Obamacare. The question they want answered is: What is the point of having insurance if you can’t afford to use it?
The out-of-touch media coverage reminds me of the apocryphal tale about elite passengers on the Titanic arguing over the bar tab as the ship takes on water. Meanwhile, the people in steerage are stuck behind those gates trying to escape before the water reaches their heads.
The water is rising fast. In 2017, the average premium increase on the individual market in Wisconsin was 16 percent. One of the most egregiously expensive plans was in western Wisconsin, costing $51,000 per year in premiums for a couple unfortunate enough to be in their 50s with three children.
The cost of Obamacare plans is staggering. In a report last year that scoured the federal database of 2017 premiums in Wisconsin, the MacIver Institute found that a family of four would fork over an average monthly premium of $1,609.11 for a platinum plan – $19,309.32 per year – while a mid-level silver plan would cost them $1,297.02 in average monthly premiums, or $15,564.24 per year
Deductibles – the out of pocket cost of using your health insurance – also keep spiraling upward. For a top-tier platinum plan in Wisconsin, we found the average deductible is $900 for a family and $450 for an individual.
However, for a mid-level silver plan, the average deductible is $7,015.71 for a family and $3,491.92 for an individual. The average catastrophic plan deductible will be $14,300 for a family and $7,150 for an individual. That’s not cut-back-on-Starbucks money, that’s bankruptcy court, even for those earning a decent salary.
Obamacare proponents constantly point to the number of people they claim are insured because of Obamacare. But conflating health insurance with access to actual health care is looking through rose-colored glasses. In the real world, Obamacare decimates household budgets, especially middle class families who don’t receive federal subsidies and are whipsawed by the full cost of both premiums and deductibles.
Despite the double digit price spikes and astronomical deductibles in Wisconsin, we drew the long stick compared with our neighbor across the Mississippi River. Minnesotans on the individual exchanges got stuck with premium hikes as high as 67 percent in 2017.
In response, Minnesota Governor Mark Dayton and the Legislature were forced to bail out 123,000 middle class families to the tune of an additional $313 million in taxpayer money.
“If you like your plan, you can keep your plan,” President Obama said in PolitiFact’s 2013 Lie of the Year. In Minnesota, that lie came with the added asterisk that taxpayers have to come to your rescue after finding out your state’s politicians fell for a federal “free money” scam.
Fortunately, Gov. Walker and Wisconsin’s fiscally conservative legislature were more skeptical of Obama’s P.T. Barnum routine, saving us from a similar fiscal calamity.
The Minnesota example highlights an important and all-too-often overlooked point. If you’re unfortunate enough to make too much money to receive a federal subsidy – like most middle class families in America – you’re on the hook for the entire inflated premiums plus exploding deductibles for your Obamacare plan.
Middle class families stuck with Obamacare are drowning in the exorbitant costs, while poorer families who do receive subsidies can’t even afford to see their doctor because their deductibles are so high that the coverage is little more than a piece of paper. Worse, if you’re so cash-strapped that you choose to go without coverage, the IRS slaps you with a fine.
I recently heard the story of one low-income Wisconsin family of five – a husband, a wife, and three kids under the age of 10. Their punishment for going without insurance for three months last year was more than $800.
Only a nanny-state bureaucrat in a Washington, D.C. corner office would be so divorced from reality that they’d think such punitive policies are somehow fair, right, or just. They should get out of their plush enclaves and see how their policies really affect people. Or better yet, if Congress can get its act together, Obamacare bureaucrats should be standing in an unemployment line.
Obamacare cheerleaders can go on cable news and pen all the columns they want touting the expansion of health insurance coverage, but what good is having health insurance if the deductible alone will send your family into bankruptcy?
Obamacare’s continuing price spiral is caused in part by declining competition across the nation. One-third of counties in the United States have only one insurer this year, according to the Kaiser Family Foundation. Residents in these counties will have only one choice – in other words, no choice at all.
Wisconsin’s Obamacare market lost an average of 1.39 insurers per county from 2016-2017 according to our analysis. Fourteen counties have just one or two insurance companies offering Obamacare plans in 2017.
Competition – which inevitably “bends the cost curve down,” to parody another failed Obama promise – is drying up by the week. Just this month, Aetna announced it would stop selling Obamacare policies entirely next year, citing $381 million in losses in the first quarter of 2017 and $700 million in total losses.
Aetna joins insurance giants Humana and UnitedHealth in completely withdrawing from Obamacare in the wake of massive, unsustainable losses. A network of other non-profit health insurance co-ops established by Obamacare have also folded, taking billions of taxpayer dollars down with them. Out of 23 co-ops, only 4 remain, including Wisconsin’s imperiled Common Ground Co-op, which survived only after a secret infusion of cash.
Insurers’ inability to simply break even on Obamacare plans is the result of far more older, sicker enrollees and far too few younger, healthier enrollees to balance the actuarial tables. Obama should’ve been honest with the American people and said the law depends on younger and healthier people paying exorbitant rates for coverage they don’t need in order to prop up the rickety system he and Democrats rammed through Congress.
Obamacare is in a death spiral. Though the House’s version of repeal and replace narrowly passed – certainly a cause for celebration – Congress remains mired in inaction and Americans remain stuck in quicksand. Reporters wringing their hands over CBO scores and telenovela theatrics should remember that few outside the beltway ultimately care about any of that.
There is no bailing out or patching up Obamacare. It will eventually sink to the bottom of the abyss. When it does, nobody in real America will thank the media for keeping them up to date with irrelevant process stories as they go down with the ship.