Affordable Care Act debut raises problems
Published: Wednesday, October 23, 2013
Updated: Wednesday, October 23, 2013 21:10
The rollout of the Affordable Care Act has been an embarrassment for the Obama Administration, and a particularly significant one, as it contributes to the perceptions held by Americans that the federal government is incapable of revolutionizing one-sixth of the U.S. economy. But the technological flaws are only the beginning of the innumerable problems set to come.
When President Barack Obama and fellow Democrats were campaigning for the law in 2009, they stated that the law would have two fundamental purposes: first, to expand insurance coverage to include every American; and second, to reduce the average cost of health premiums. It appears now, however, that neither of those central objectives will be met.
The ACA, as it turns out, will likely only extend health insurance coverage to approximately 25 million Americans, leaving a projected 31 million uninsured over the next decade.
And moreover, the notion that insurance premiums will be lower under the healthcare law is inconsistent with countless studies that have been conducted by policy analysts.
In order for the law to be even mildly successful, it must attract 7 million Americans to sign up through the exchanges. But the basic methodology of the law would require the young and healthy to sign up as well, in order to subsidize the elderly and those with preexisting medical conditions. Thus far, based on data from the administration, less than a half million Americans have created profiles–not necessarily selected insurance coverage–on the ACA exchange website. And it is probably fair to assume that the sick would have been most inclined to have signed up at this point, while younger Americans are contemplating whether adding an extra monthly bill in a sluggish economy is worth it, considering the penalty for not participating in the exchanges would be far less than the actual cost of a premium.
The effect that the ACA would have on the overall cost of insurance has been researched. For instance, The Manhattan Institute, a New York-based libertarian think tank, released a study last month on the projected cost of premiums. According to the study, insurance rates for young men will rise by 99 percent, while younger women will see an average rate hike of 58.5 percent. North Carolinians will experience significant rate shock, with individual-market rates estimated to triple for women and quadruple for men. On average, in the 13 states where sufficient governmental data has been provided, the Institute concluded that there would be an average rate hike of 24 percent.
And in states–typically ones that already have heavily regulated insurance markets–where average premiums are set to decrease, new evidence shows that may not be entirely the case. The exchange rates in Illinois, for example, are in fact lower than prior to the law’s implementation. However, an analysis conducted by the Chicago Tribune earlier this month indicated that in Cook County (the second-most populated county in the U.S.), “21 of the 22 lowest-priced plans offered…have annual deductibles of more than $4,000 for an individual and $8,000 for family coverage,” thousands of dollars more than someone who receives insurance through their employer. Kelly Sullivan, a spokeswoman for the Illinois insurance marketplace deemed the rates “quite reasonable,” considering the burdens imposed on insurance companies to indiscriminately accept whoever applies for coverage.
This is coupled with brand new revelations that hundreds of thousands of Americans are receiving letters informing them that their health insurance has been cancelled. This is directly contrary to promises made by the President five years ago, where he repeatedly claimed “If you’re one of the more than 250 million Americans who already have health insurance, you will keep your health insurance.” According to the Kaiser Family Foundation, a non-partisan foundation dedicated to health research, “some receiving cancellations say it looks like their costs will go up; despite studies projecting about half of all enrollees will get income-based subsidies.”
The administration is left now to defend a law that is making House Democrats increasingly vulnerable politically, and a law that will likely not achieve any of its stated objectives. Not one Republican voted for the law, and it was rushed through via a parliamentary tactic by the Senate Majority Leader Harry Reid in 2009. The countless problems that will arise from the federal government’s interference into the healthcare sector as a result of an ill thought-out law will continue to burden Democrats politically in the near future.