Next year, premiums for Obamacare’s most popular plans will explode by an average of 37 percent, according to a new analysis from the Department of the Health and Human Services.
This isn’t just some one-time fluke. Obamacare has been driving up costs and reducing choices for years. Just ask the young mother in Texas who is paying close to $1,300 a month (more than her mortgage payment) in health premiums, or the Montana woman with a pre-existing condition who has coverage through Obamacare she can't even use.
While higher rates mean more subsidies for those who qualify for assistance, there are an estimated 7 million people in the individual market who aren’t shielded from the pain. Fortunately for them, relief may be on the way as President Trump recently took action to spur the creation of new, affordable health insurance options.
Quite predictably, the president’s actions, as well as his decision to cancel insurance company subsidies known as Cost Sharing Reduction payments, are being framed as an act of sabotage by Obamacare supporters.
This couldn’t be further from the truth.
First, the president’s executive orders expanding access to association health plans, easing restrictions on employer-funded health reimbursement accounts, and allowing a market to form for more affordable and flexible plans are all aimed at lowering costs and delivering relief to those being crushed by Obamacare.
In particular, the president’s move to restore the length of affordable flex plans to a year and allow them to be renewed means that customers could finally have a better alternative to Obamacare’s costly, one-size-fits-all policies. With nearly 30 percent of Americans who shop for insurance on the law’s exchanges expected to have only one insurer to pick from next year, the need for more competition at lower prices couldn’t be more urgent.
Next, contrary to what critics would have you believe, the CSR payments went directly to insurance companies, not patients. Without them, low and middle-income Americans will continue receiving discounted out-of-pocket costs – it’s just that big insurers won’t be able to continue milking taxpayers in the process. But don’t feel too bad for them; they seem to be doing okay.
Moreover, despite years of these giveaways, Obamacare has been consistently unstable. Since 2013, average Obamacare premiums have risen by 105 percent, with average deductibles climbing to more than $6,000 this year for bronze-level plans. Clearly, these subsidies haven’t reduced costs – they’ve driven them higher and higher, starting long before Trump became president.
Last but not least, these payments were being made illegally. “Paying [those] reimbursements without an appropriation thus violates the Constitution,” declared U.S. District Court Judge Rosemary Collyer last year. Just last week, a second federal judge denied an emergency request from 18 states and the District of Columbia to force the president to continue making the payments illegally. “It appears initially that the Trump Administration has the stronger legal argument,” ruled U.S. District Court Judge Vince Chhabria.
The message from the courts couldn’t be clearer: If the government wants to line the pockets of insurance companies with taxpayer dollars, Congress needs to appropriate it.
The president’s moves were necessary due to Congress’ inability to repeal Obamacare. And despite cries from lawmakers in both parties to restore CSR payments, doing so would only maintain the status quo of skyrocketing costs and deteriorating care.
Instead, Congress should focus on repealing Obamacare and any deal to temporarily extend the CSRs should, at the very least, include significant relief for those suffering from the law’s collapse.
As the White House has suggested, a smart place to start would be targeting the law’s onerous individual and employer mandates, which disproportionally hurt lower-income people and have failed to stabilize Obamacare’s markets.
The Left will point to headlines claiming people could lose their coverage, but don’t buy the hysteria. Medicaid recipients will likely choose to remain in the program, while non-Medicaid patients and small business employees will flock to more affordable coverage options fostered by the president’s executive orders.
And though these mandates may be popular among the special interests who benefit from a mandated customer base, they certainly aren’t with ordinary people. If lawmakers rush to preserve them, it’s pretty clear who they’re standing up for.
Obamacare is not working, it’s not affordable, and its government-designed plans aren’t flexible. It makes no sense to continue punishing individuals and employers with government fines for not buying unaffordable healthcare plans that don’t provide access to quality care.
Nathan Nascimento is the vice president of policy at Freedom Partners Chamber of Commerce.
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