Source: I&I | Rich Yurkowitz

How can we measure the success or failure of Obamacare? Let’s focus on the two most important measures: costs and access. My analysis shows two failures. Let’s look at the facts.

Little known is that Obamacare plans have increased in cost of nearly 200%. While increases have stabilized more recently, increases in the early years of Obamacare ranged from 8% to 37% per year:

Astoundingly, the average increase from 2013 to 2021 was 172%, meaning if a plan cost $10,000 in 2013 it would cost $27,200 just 8 years later!

Why is this not widely known?

One reason is that many writers did not want this failure to be noticed, so they didn’t “kick the tires” of the marketplace rates. Analysis often lacked any context for what the numbers meant.

Instead, writers overwhelmed readers with data in sentences rather than in a clear table like that nearby; introduced a myriad of other confusing data points, such as premiums by plan type (a.k.a., the metallic levels); implied the increases weren’t that high, like not being clear what was being calculated (for instance, a 172% increase reflects premiums that are 272% of the original cost, while a 172% increase could imply the increase is “only” 72%); showed results for just one year rather than Obamacare-to-date – a “divide and conquer” approach; and implied that premium increases wouldn’t be felt because of subsidies (true, but subsidies merely shift cost and obfuscate the real cost of the program).

Underreported was that 90% of those on Obamacare received subsidies to buy coverage, anywhere from 1% to 100% of the premium. In other words, while the annual premium could be $27,700, if a family were to be charged merely $5,000 after subsidy (the subsidy averaged 80% of the premiums in 2022), would the increase in premium even be noticed? Also, the more the premiums increased, the more the subsidy increased. No wonder people didn’t know what Obamacare actually cost!

Obamacare Enrollment Under 10%

Fewer than 15 million people enrolled in the Obamacare marketplace in 2022. This figure is the highest annual enrollment ever in Obamacare. However, the Congressional Budget Office (CBO) originally projected 25 million would enroll. As with most projections, reality can be quite different than rosy projections.

By comparison, 20 million people newly enrolled in Medicaid due to the expansion under Obamacare. So, 60% of the new enrollments (20 million out of 35 million) were due to Medicaid enrollments, which could have been accomplished by merely lowering the requirements to enroll. So, passage of Obamacare was unnecessary just to get people to enroll in Medicaid.

To put these figures into proper context, the number of uninsured individuals prior to Obamacare was 44 million people, and is now 29 million, a 34% decrease.

Conclusion

Some have been trying to figure out what’s wrong with Obamacare and have concluded that:

• premiums are very high,
• insurers lost money,
• insurers left the market,
• there are still 29 million uninsured.

All legitimate issues, but they counter with:

• premiums have always been high,
• insurers make too much money,
• insurers left the market, so the government should step in,
• there are still 29 million uninsured, so we need to go further.

The bottom line is that Obamacare cost increases have been astronomical and underreported. Those increases have been mitigated by subsidies, but at great expense (also underreported). Finally, Obamacare’s complexity was unnecessary as 60% of the increase in the number of people covered was due to Medicaid expansion, which could have been accomplished without Obamacare.

That Obamacare could pass and be touted as a success because some people now have coverage is appalling.  At what cost? A 172% increase in cost, when healthcare costs in the rest of the market increased just 24% (based on medical CPI)?

How could Obamacare have been passed given these cost increases? This quote suggests an answer: “Lack of transparency is a huge political advantage, and basically call it the stupidity of the American voter or whatever, but basically that was really, really critical to getting the thing to pass.” – Jonathan Gruber, ACA architect, 2013

Rich Yurkowitz is a health care actuary and author of Medicare For All – Really?!