Obamacare Doesn’t Lower Health Costs
President Obama made another speech on July 18th drumming up support for The Affordable Care Act, better known as Obamacare.
In it, the President highlighted lowering health care premiums by saying right off:
New York announced that average premiums for consumers who buy insurance in their new marketplace will be at least 50 percent lower next year than they are today. Think about that — 50 percent lower. (Applause.)
– President Barack Obama, Obamacare Speech, 7/18/2013
Great news, right? Wrong. When Obama speaks, there’s always more to it than meets the eye.
A stunning Presidential opening announcement turns to dust under closer scrutiny.
How does New York Lower Premiums Under Obamacare?
On July 23rd The Wall Street Journal examined the 50% reduction announcement in an investigative piece called “Obama’s New York Model“. It is subtitled, “How the state destroyed its insurance market using ObamaCare rules“.
The bottom line is this, New York already has premiums nearly twice as high as its neighbors because of stronger Obamacare-like state regulations instituted in 1992 and 1996. The reason premiums will go down now is because Obamacare deregulates New York’s health care system. Obamacare has less stringent regulations than New York State!!
Individual per person premiums in New York are about $500/mo. In next door Connecticut, premiums average $306/mo. In next door Pennsylvania, premiums are even less – $225/mo.
A 50% reduction in double-sized premiums isn’t as great a deal as it sounds, now is it?
It is especially bad news for folks in Pennsylvania and other states who will be paying higher premiums next year to cover for expanded Medicaid services in 2014.
The Core Of Obamacare
The engine powering all health care insurance programs, both private and public, is shared sacrifice. The burden of the cost of health care is spread over the largest population possible.
Healthy individuals pay more so that unhealthy and poor people can get health care they need.
It is a wonderful, altruistic concept… right up until you have to pay for it.
Not only do average premiums for all rise under Obamacare, but so does taxpayer costs.
The Taxpayer Cost of Obamacare
For example, no one is turned down for pre-existing conditions. No $$ limits. Free checkups. More Medicaid.
People like that. Perks are Obamacare’s magnetism.
Expensive add-ons do not come without cost.
That is the downside.
The misnomered Affordable Care Act was not supposed to cost taxpayers anything. Obama told us it is completely paid for without raising taxes “one red cent”.
The latest May 14, 2013 CBO report projects the annual taxpayer cost of Obamacare at about $180 billion/year. That is twice the projected “paid for” cost of Obamacare when it was passed back in March, 2010.
Worse yet, $500 billion of the cost of Obamacare comes from borrowing out of the Medicare Trust Fund. No replacement funding for Medicare has yet been prescribed. Medicare will have to be paid to.
And that doesn’t even include each State’s increased tax burden for the cost of Obamacare in a few years.
Its a taxpayer’s nightmare.
More Bumps in the Road
The WSJ points out two more damaging Obamacare-related New York facts:
- Every single private insurer dropped coverage in New York
- Individuals dropped health care insurance in droves
Wanna keep your current provider? The New York example says no. Many companies will change or drop coverage. Mutual of Omaha was last out. Customers average age went up 11.5 years before coverage costs forced them out.
1,200,000 New Yorkers bought individual plans in 1992. By 2001 that fell to 128,000. Today, there are only 31,000. According to the WSJ, that is only 0.0016% of New York’s population.
Who dropped or didn’t buy insurance because of cost in NY? The young.
In New York, when given a choice, the young dropped health care because of the high cost. It is hoped that mandating that everyone buy health care will fix that problem. Will it?
Already, that isn’t going to happen.
The Supreme Court ruled that states could choose to opt-out of Obamacare. As of 6/14/2013, 19 states indicate they will not or are leaning against participating in Obamacare. Five more are participating using an “alternative model”. Only 26 governors have come out in support of Obamacare.
It’s well known that many employers will simply choose to drop coverage. It is cheaper to pay the fine than provide coverage. Early this month the Administration chose to defy its own law and delay implementing the employer mandate for a year.
The high cost of Obamacare is causing states to drop out. They are dropping despite the carrot offered by the federal government to pay 100% of the state’s share for the first couple years, beginning in 2014.
It is likely, even under threat of fines, that uninsured young working people will buy mandated insurance; most because they can’t afford it. But the Medicaid rolls will swell in participating states.
It all adds up to a fiscal disaster of epic proportions.