How Obamacare Harms Consumers
The Administration and Democrats in Congress have claimed the health care law’s “Bill of Rights” grants consumers important protections. Unfortunately, in many cases the law’s provisions will harm, not help, consumers, by raising premiums and impeding access to coverage, including for individuals with pre-existing conditions:
A Broken Presidential Promise—And Higher Premiums for Families. The supposed benefits being touted by the Administration do not come without costs—and those costs are being passed on to consumers in the form of higher premiums. In recent months, insurance carriers have cited the new regulations implemented to date as raising premiums by one to nine percent, while some consumers could face premium increases of more than 20 percent.”[1] The non-partisan Congressional Budget Office agrees, concluding that individual health insurance premiums will increase by $2,100 per family as a result of the law.[2] Candidate Obama promised to cut insurance premiums by an average of $2,500 per family,[3] but the legislation he signed into law has already had the opposite effect.
Losing Current Coverage. According to the Administration’s own estimates, its onerous regulations will force half of all employers – and as many as 80 percent of small businesses – to give up their current coverage within the next two years.[4] While President Obama claimed that “the government is not going to make you change plans under health reform,”[5] the regulations his Administration drafted admitted that “after some period of time, most plans will relinquish their grandfathered status,” meaning American workers will lose the coverage they have now and become subject to more costly federal requirements.[6]
Child-Only Policies Disappearing. While Democrats have trumpeted the ban on pre-existing condition limitations for children that took effect in September, that provision has actually REDUCED access to insurance for many children. In fact, insurers have stopped selling child-only health insurance policies in many states as a result of this provision.[7] This severe unintended consequence could portend further adverse impacts when the law’s major insurance provisions become effective in January 2014.
Seniors Pay Higher Premiums—So Drug Companies Can Benefit. The Administration has touted the $250 rebate checks and drug discounts provided to seniors in the Medicare Part D “doughnut hole.” However, more than nine in ten Medicare beneficiaries will not receive this supposed benefit.[8] Moreover, more than 17 million seniors participating in Medicare Part D[9] will face higher prescription drug insurance premiums,[10] so that the pharmaceutical industry can benefit from its “rock-solid deal” struck behind closed doors with President Obama and congressional Democrats.[11]
Seniors Left Out—So AARP Can Benefit. While the Administration claims the health care law will protect individuals with pre-existing conditions from insurance company “abuses,” seniors were left out of the law’s supposed protections. In fact, the law exempts Medigap supplemental insurance policies from the prohibitions on pre-existing condition exclusions, so that AARP can continue to impose waiting periods on seniors, as it does currently.[12] Perhaps unsurprisingly, AARP—which spent millions promoting a health care law notoriously unpopular among seniors—generates a substantial portion of its revenues from the sale of these lucrative Medigap policies exempt from the law’s “consumer protections.”[13]
“Freedom” through Government Forced-Insurance? The Administration claims the health care law is “giving Americans more freedom in their health care choices.”[14] In reality, though, the law forces Americans to buy a product—government-defined health insurance—for the first time ever.[15] This constitutionally dubious intrusion gives the federal government massive new powers, thus eroding individual freedom.
[1] “Health Insurers Plan Hikes: Rate Increases Are Blamed on Health Care Overhaul” by Janet Adamy, Wall Street Journal, September 8, 2010, http://online.wsj.com/article/SB10001424052748703720004575478200948908976.html?mod=rss_Health
[2] Letter from CBO to Senator Bayh, November 30, 2009, http://cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf
[3] “20 Promises for $2,500: All Americans Now Await Lower Premiums Promised by Obama,” compilation of video clips at http://www.youtube.com/watch?v=0yRc1GR9nO0
[4] “Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act,” Federal Register, June 17, 2010, http://edocket.access.gpo.gov/2010/pdf/2010-14488.pdf
[5] President Obama, press conference, June 23, 2009, http://www.whitehouse.gov/the_press_office/Press-Conference-by-the-President-6-23-09/
[6] Draft interim final rule by Departments of Labor, Treasury, and Health and Human Services regarding grandfathered health insurance status, obtained June 10, 2010, http://www.posey.house.gov/UploadedFiles/HealthCareReformDraftRegulations-June-2010.pdf, p. 56. Even though the number of individuals affected by the rule remained unchanged from the internal draft to the rule as published, the sentence in question was subsequently edited, such that the published rule omitted the fact that “most” grandfathered plans would lose their status.
[7] “Big Health Insurers to Stop Selling New Child-Only Policies” by Duke Helfand, Los Angeles Times, September 22, 2010, http://www.latimes.com/health/la-fi-kids-health-insurance-20100921,0,5977746,print.story.
[8] “Report to the Congress: Medicare Payment Policy,” Medicare Payment Advisory Commission, March 2010, http://medpac.gov/documents/Mar10_EntireReport.pdf, p. 286
[9] Ibid.
[10] Comparison of Projected Medicare Part D Premiums Under Current Law and Under Reconciliation Legislation Combined with H.R. 3590 as Passed by the Senate, CBO, March 19, 2010, http://cbo.gov/ftpdocs/113xx/doc11379/Comparison.pdf
[11] “White House Affirms Deal on Drug Cost,” by David Kirkpatrick, New York Times, August 5, 2009, http://www.nytimes.com/2009/08/06/health/policy/06insure.html
[12] The definition in Section 1201(2)(A) excludes Medigap plans from the prohibition on pre-existing condition exclusions. Regarding AARP’s current use of waiting periods for sick Medigap applicants, see, for instance, the New York state insurance commissioner’s website, which indicates that AARP-sponsored Medigap plans impose a six-month waiting period on applicants with pre-existing conditions.
[13] “ObamaCare Rewards Friends, Punishes Enemies” by Karl Rove, Wall Street Journal January 6, 2011, http://online.wsj.com/article/SB10001424052748704405704576063892468779556.html
[14] Letter from Secretaries Sebelius, Solis, and Geithner to Congressional leaders, January 5, 2011, http://www.healthcare.gov/center/letters/repealcosts.pdf
[15] “Years of Wrangling Ahead for Health Care Law,” by Kevin Sack, New York Times, December 13, 2010, http://www.nytimes.com/2010/12/14/health/policy/14legal.html