With double-digit percentage increases in premiums and the possibility of the Supreme Court throwing out subsidies in state-run exchanges, the Affordable Care Act is swiftly becoming anything but affordable. Whether one accepts some studies that predict modest increases in premiums in 2015 or other reports that indicate significant cost increases across the board, the affordability quotient of President Obama’s flagship policy is definitely shrinking.
It is true that the HealthCare.gov exchanges have increased the choices that consumers have in their healthcare selection. The reality looms that purchasing this care is not always as inexpensive as the name Affordable Care Act would insinuate. From the early days of the president’s incessant mantra “if you like your plan, you can keep it”, the selling point was always that one could acquire improved medical care and coverage at a discounted, affordable price. As the previously insured were kicked off of what the government deemed clunker plans and were absorbed into the marketplace for coverage, many were greeted with sticker shock. To duplicate their same level of coverage would require a significant increase in premiums to be paid.
For new subscribers who fell within the 400 percentile and below range of the poverty line, subsidies were to offset the premium expense. However, minimal changes in income can effect qualifications and raise premiums, sometimes dramatically for a younger worker. This is a serious area of concern when combined with the pending Supreme Court ruling that will determine whether subsidies are legal in non state-run exchanges.
In order for state residents to receive federal subsidies, their state of residence is required to maintain a marketplace where coverage can be purchased. 36 states opted out of operating their own marketplace and require state residents to do health care business on the HealthCare.gov federal marketplace. The Affordable Care Act does not legally authorize subsidies for federal market place enrollees. About 85 percent of the 5 million HealthCare.gov customers received these subsidies due to their lower-income constraints. Faced with doubling or tripling in their premiums, many of these enrollees already struggling financially would leave the marketplace. An even worse consequence is that as the healthy drop out, it leaves the risk pool filled with sicker enrollees and could spike premiums for these people as well. Many critics say this will make the Affordable Care Act unsustainable and implying that it makes healthcare more affordable is a most inaccurate depiction.
The website Health Pocket compared average premiums before the Affordable Care Act (ACA) went into action and post ACA 2014 premiums. Average monthly premiums have increased across all demographics – male and female. The premiums for younger customers, specifically 20-year-old non-smoking males increased by 78 percent in 2014. Women in the same category saw their premiums increase by 45 percent. Experts attribute many of these increases in premiums to the added health benefits required by the Affordable Care Act such as preventative care and contraception with no cost sharing by enrollees. These policies are contrasted to pre-ACA policies that were catastrophic in design but coverage cost less for the customer.
Enrolling millions of previously uninsured Americans into legitimate health care resources was and remains an auspicious and honorable goal. Implementing a federal program that represents one sixth of the GDP is monumental in nature and scope. However, the facts and research support the contention that the Affordable Care Act is anything but affordable.
Opinion by Chris Marion
Photo by Quinn Dombrowski – Flickr License