Brace yourself for the next health insurance crisis: the uninsured middle class. The Affordable Care Act added millions of mostly poor people to the insurance rolls. But the law is driving premiums so high that middle-class people can no longer afford insurance. Several million are expected to drop coverage in 2018. Under Obamacare, poor lives matter — middle class lives, not so much.
With GOP lawmakers paralyzed about how to repeal and replace Obamacare, Sens. Patty Murray, D-Wash., and Lamar Alexander, R-Tenn., are swooping in with a plan to keep the floundering health law afloat. The senators cloak themselves in the mantle of bipartisan reasonableness, but don’t be fooled. There’s nothing bipartisan about their scheme. The big losers are middle-class buyers priced out of the individual insurance market and taxpayers footing the bill for the billions in extra spending these fixers are proposing.
The winners are insurance companies.
Insurers are demanding $8 billion a year in taxpayer funds to compensate them for giving breaks on deductibles and co-pays to low-income customers. Although a federal court has already ruled insurers aren’t entitled to the money, they’re threatening to drop their Obamacare plans if they don’t get it. The Senate’s phony fixers are only too willing to cave.
Murray has already laid down the ground rules, demanding that any “fix” supported by Democrats can’t change the Affordable Care Act’s one-size-fits-all coverage requirement. That continues to force single men to pay for maternity coverage and childless couples to pay for pediatric dental care. Murray also forbids changing the ACA regulation that makes the healthy pay the same premiums as people with pre-existing conditions — community pricing. She’s barring the very changes needed to lower premiums.
Also backing the $8 billion payout to insurers is a group of more than 40 Republican and Democratic House members who call themselves the Problem Solvers Caucus. Trouble is, Obamacare’s regulations are the problem, and they’re proposing only minor tweaks.
The ACA is actually two laws glued together: a vast Medicaid expansion to cover the poor and a federal takeover of individual insurance markets, previously regulated by states. Since that takeover, individual premiums have more than doubled, and they’re predicted to rise another 25 to 35 percent next year. The mandatory benefit package and community pricing regulation are to blame, according to actuarial experts. Premiums will never go down until Obamacare’s regulations are repealed. That would liberate the middle class to buy affordable insurance without hurting the poor on Medicaid.
Obamacare’s defenders insist premium hikes are not a problem because whenever premiums go up, so do subsidies for low-income buyers. They pay the same year after year, regardless of how premiums soar.
These Obamacare apologists never mention buyers who don’t qualify for subsidies. Under the law, individuals earning more than $47,520 and couples earning more than $64,080 have to pay the full premium. No compassion for them.
Not to mention the 6.9 million people who buy coverage outside the ACA exchanges, where there are no subsidies. In 2017, the average premium for a family of four buying on eHealth reached $14,300 with a whopping $8,322 deductible. That means shelling out more than $22,600 before seeing a penny from insurance. You can pay your mortgage for that.
In 2018, many buyers will conclude they can’t afford insurance, because it would consume up to a quarter of their pre-tax income, according to University of Houston health law professor Seth Chandler.
Obamacare’s defenders are also ignoring who pays for these ever-rising subsidies: taxpayers. And taxpayers are hurting. In 2016, the average household paid 41 percent more taxes than just three years earlier. Any health law “fix” that doesn’t address the impact of soaring premiums on taxpayers should be rejected hands down.
Senate hearings will probably include a lot of self-promoting bipartisanship from the politicians but no real help for middle-class insurance buyers and taxpayers, the forgotten victims of Obamacare.
Email Betsy McCaughey, a senior fellow at the London Center for Policy Research and a former lieutenant governor of New York State, at email@example.com.