Skyrocketing Premiums Show Obamacare’s Failure to Deliver

According to a recently released report, extending employer-provided health coverage to the average American family equates to buying that family a moderately-priced car every single year. This provides further proof that Barack Obama “sold” a lemon to the American people in the form of Obamacare.

The inexorable rise in health care costs—a rise that candidate Obama pledged to reverse—shows how Obamacare has failed to deliver on its promise. Yet Democrats want to “solve” the problems Obamacare is making worse through even more government regulations, taxes, and spending. Struggling American families deserve relief from both the failed status quo, and Democrats’ desire to put that failed status quo on steroids.

Study of Employer Plans

Obamacare has failed to deliver on that pledge, as premiums continue to rise higher and higher:

Why has Obamacare failed to deliver? Several reasons stand out. First, its numerous regulatory requirements on insurance companies raised rates, in part by encouraging individuals to consume additional care.

The pre-existing condition provisions represent the prime driver of premium increases in the exchange market, according to a Heritage Foundation paper from last year. However, because employer-sponsored plans largely had to meet these requirements prior to Obamacare, they have less bearing on the increase in employer-sponsored premiums.

Second, Obamacare encouraged consolidation within the health care sector—hospitals buying hospitals, hospitals buying physician practices, physician practices merging, health insurers merging, and so on. While providers claim their mergers will provide better care to patients, they also represent a way for doctors and hospitals to demand higher payments from insurers. Reporting has shown how hospitals’ monopolistic practices drive up prices, raising rates for patients and employers alike.

Same Song, Different Verse

More Regulations: On issues like “surprise” billing or drug pricing, Democrats’ favored proposals would impose price controls on some or all segments of the health care industry. These price controls would likely limit the supply of care provided, while also reducing its quality.

More Spending: Most Democratic proposals, whether by presidential candidates, liberal think-tanks, or members of Congress, include major amounts of new spending to make health care “affordable” for the American people—an implicit omission that Obamacare (a.k.a. the “Affordable Care Act”) has not delivered for struggling families.

More Taxes: Even though some don’t wish to admit it, the Democratic candidates for president have all proposed plans that would necessitate major tax increases, from the hundreds of billions to the tens of trillions of dollars—even though at least two of those candidates have failed to pay new taxes imposed by Obamacare itself.

The latest increase in employer-sponsored health premiums demonstrates that hard-working families deserve better than Obamacare. It also illustrates why the American people deserve better than the new Democratic plans to impose more big government “solutions” in the wake of Obamacare’s failure.

This post was originally published at The Federalist.

Junk “Study” Demonstrates Liberal Think-Tank’s Bias

Why would an organization billed as a “respected source of health care data” publish an analysis with mutually contradictory conclusions? In the case of the Kaiser Family Foundation, the answer is simple: To defend Obamacare—even if the facts don’t align with one’s conclusions.

As conservatives have noted for years, Obamacare encourages states to discriminate against individuals with disabilities—a prime example of how government intervention in the health care system ultimately hurts those the left claims they want to help. Liberals, understanding the political power of such charges, feel compelled to push back on this narrative. While they don’t have many actual facts with which to do so, that hasn’t stood in the Kaiser Family Foundation’s way.

Obamacare’s Discrimination, Explained

If you could gain 50-76 cents for doing one thing, and 90 cents for doing another, which would you choose? I know which I would.

When I served on the Commission on Long-Term Care in 2013, it explored an area of health policy unknown to much of the public: Hundreds of thousands of individuals with disabilities remain on Medicaid waiting lists for home and community-based care. While federal law requires state taxpayers to pay nursing home benefits for all eligible Medicaid patients, coverage of community-based services remains optional, so states can—and do—establish waiting lists to control their Medicaid spending.

These waiting lists preceded Obamacare, so Obamacare didn’t cause the waiting lists per se. And individuals with disabilities on the waiting lists do have their health care needs paid for by Medicaid, even as they wait to become eligible for home-based care (e.g., help with bathing, dressing, etc.). But sheer common sense indicates that states will prioritize coverage of able-bodied adults—for which they get paid a higher match from the federal government—than eliminating their waiting list for individuals with disabilities.

The Flawed Premise

For the past several years, Kaiser has attempted to rebut charges that Medicaid expansion has affected waiting lists for individuals with disabilities. Their studies, including one released in April, claim that there is no relationship between whether a state has expanded Medicaid and increases or decreases in its waiting lists.

However, as I first noted two years ago, Kaiser’s over-simplistic analysis does not begin to consider the many other factors that affect decisions about their Medicaid programs and waiting lists. To use the most obvious example, the average state that has not expanded Medicaid is poorer than the average state that has. Connecticut, with a median income of $73,781 in 2017, has more resources to expand Medicaid to able-bodied adults and reduce its waiting lists than a state like Alabama, which had a median income of $46,472.

If Kaiser wanted to do a thorough analysis, it would control for this variable, and others. For instance, a good econometric analysis would factor in states’ morbidity rates—because states with sicker populations may have more individuals with disabilities needing care—along with the underlying cost of care, because states would have to spend more to reduce their waiting lists in areas with higher prices.

Contradictory Claims

How superficial are Kaiser’s conclusions? The section of its April paper right after the passage claiming no relationship between Obamacare and waiting lists includes this doozy:

Waiting lists are a function of the populations a state chooses to serve and how the state defines those populations; both of these factors vary among states, making waiting lists an incomplete measure of state capacity and demand for [home and community-based services] and not directly comparable among states. [Emphasis original.]

If waiting lists for individuals with disabilities are “not directly comparable among states,” then why did Kaiser in the preceding section claim Obamacare’s Medicaid expansion has nothing to do with waiting lists—a conclusion that by definition involves comparing waiting lists among states?

The question practically answers itself. Kaiser just hopes you won’t notice.

Talking Point versus Research

After more than two months, the researcher, Mary Beth Musumeci, would not deign to defend her “research” with a direct reply. Instead a Kaiser spokesman sent me what amounted to a polite brush-off, replicated in full below:

Thank you for your interest in our work. We appreciate people taking the time to consider our work and provide constructive feedback on it, and our team discussed your comments and ideas.

The data in the brief are presented as a simple, descriptive comparison of trends in wait lists stratified by expansion status, and we also tried to be clear about major limitations of the data, including caveats in state comparisons of wait lists. While we agree that further econometric analysis to assess causality could build on this work and contribute to policy understanding, the posted brief was not an attempt to undertake such analysis.

We appreciate your feedback and will consider it as we continue to develop our work in this area, and we hope our work serves as a useful basis for your own analysis and econometric research to undertake the type of work you suggest in your comments.

I responded with one simple question: Does the Kaiser Family Foundation have any plans to conduct an econometric study on Medicaid expansion and waiting lists? As I noted in my response:

You’ve admitted the limitations of your own analysis to date, but you’ve repeated these types of assertions for several years—without doing the type of in-depth research that you concede would be both warranted and more accurate. Why not?

Kaiser’s communications department responded that they don’t have that type of study planned. I won’t hold my breath for them to conduct this type of econometric study, either. As with the issue of pre-existing conditions, Kaiser won’t ask a question to which it doesn’t want to know the answer. Far better to use a crude and highly flawed “study” to claim that Obamacare hasn’t affected Medicaid waiting lists—the political conclusion the Kaiser analysts want to support.

A supposed “fact check” on the disability waiting list issue two years ago called the Kaiser Family Foundation a “respected source of health care data.” But by issuing mutually contradictory conclusions to maintain a political talking point, and not conducting the in-depth research that they admit the issue of Medicaid waiting lists warrants, Kaiser again reveals itself not so much as a respected source of health care data as a highly liberal one.

This post was originally published at The Federalist.

Another Study Confirms Obamacare as the Unaffordable Care Act

Despite the high level of partisanship in the United States, both sides can agree on something even as controversial as health care: Both Democrats and Republicans believe Obamacare has failed to deliver.

Based on their last primary debate, Democrats running for the 2020 presidential nomination can’t give away more health care subsidies fast enough. Some of them want to abolish Obamacare outright. But all of them agree the law has not lived up to Barack Obama’s claims during the 2008 campaign, when he repeatedly promised that hisplan would reduce premiums by $2,500 for the average family.

Shrinking Without Subsidies

The CMS analysis of risk adjustment data submitted by insurers focuses on the unsubsidized marketplace. These individuals, who make more than 400 percent of the federal poverty level ($103,000 for a family of four in 2019), do not receive any subsidies from the federal government to offset their premiums.

The analysis concludes that, while the subsidized marketplace has remained steady for the past several years, the number of unsubsidized people purchasing insurance has steadily shrunk as premiums continue to decline. In 2018, even as average monthly subsidized enrollment increased by a modest 4 percent, average monthly unsubsidized enrollment plummeted by 24 percent.

From 2016 through 2018, the unsubsidized market shrank by an even larger amount. Successive price increases — an average 21 percent premium rise in 2017, followed by another 26 percent jump in 2018 — priced many people out of the market.

During those two years, the average monthly enrollment by unsubsidized people fell by 40 percent, from 6.3 million to 3.8 million. Six states saw their unsubsidized enrollment drop by more than 70 percent, with Iowa’s unsubsidized enrollment shrinking by a whopping 91 percent.

The large percentages of unsubsidized people dropping coverage in many states — in most cases, because they could not afford their rapidly escalating premiums — show the unstable nature of the Obamacare “marketplaces.” With only people who qualify for subsidies able to afford their premiums, most states’ insurance markets have become dependent on the morphine drip of subsidies from Washington.

‘Popular’ Preexisting Conditions?

Why have premiums skyrocketed so that only people receiving federal subsidies can afford to pay their insurance rates? A Heritage Foundation analysis from last year provides a clear answer:

A cluster of [Obamacare] insurance-access requirements — specifically the guaranteed-issue requirement and the prohibitions on medical underwriting and applying coverage exclusions for pre-existing medical conditions — accounts for the largest share of premium increases.

In other words, the preexisting condition provisions have proven the largest factor in pricing literally millions of people out of their health insurance coverage. This means, ironically enough, such people now have no coverage should they develop any such condition.

The left does not want to talk about these people. While the liberal Kaiser Family Foundation will survey Americans about the supposed popularity of the preexisting condition provisions, the organization refuses to survey Americans about the cost of these regulations — for instance, whether people think those “protections” are worth spending an extra several thousand dollars a year in higher insurance premiums. As the old legal saying goes, “Don’t ask a question to which you don’t want to know the answer.”

But the American people need to know the answers and need to understand the effects of Obamacare. Liberals wouldn’t have you know it, but families care more about the affordability of health coverage than about losing their coverage due to a preexisting condition. Reforms codified by the Trump administration will help provide portable and more affordable coverage to many Americans and represent one of several better solutions to tackle the preexisting condition problem.

The left’s “solutions” to Obamacare’s skyrocketing premiums represent more of the same — more taxes, more spending, and more subsidies to make coverage “affordable” for a select few. But sooner or later, the left will eventually run out of other people’s money. The Unaffordable Care Act’s failure to deliver demonstrates that the American people need and deserve a better approach than the left can devise.

This post was originally published at The Federalist.

Do House Republicans Support Socialized Medicine?

Health care, and specifically pre-existing conditions, remain in the news. The new Democratic majority in the House of Representatives has lined up two votes — one last week and one this week — authorizing the House to intervene in Texas’ lawsuit against the Affordable Care Act, also known as Obamacare. Speaker Nancy Pelosi, D-Calif., claims that the intervention will “protect” Americans with pre-existing conditions.

In reality, the pre-existing condition provisions represent Obamacare’s major flaw. According to the Heritage Foundation, those provisions have served as the prime driver of premium increases associated with the law. Since the law went into effect, premiums have indeed skyrocketed. Rates for individual health insurance more than doubled from 2013 through 2017, and rose another 30-plus percent last year to boot.

As a result of those skyrocketing premiums, more than 2.5 million people dropped their Obamacare coverage from March 2017 through March 2018. These people now have no coverage if and when they develop a pre-existing condition themselves.

A recent Gallup poll shows that Americans care far more about rising premiums than about being denied coverage for a pre-existing condition. Given the public’s focus on rising health care costs, Republicans should easily rebut Pelosi’s attacks with alternative policies that address the pre-existing condition problem while allowing people relief from skyrocketing insurance rates.

Unfortunately, that’s not what the Republican leadership in the House did. Last Thursday, Rep. Kevin Brady, R-The Woodlands, offered a procedural motion that amounted to a Republican endorsement of Obamacare. Brady’s motion instructed House committees to draft legislation that “guarantees no American citizen can be charged higher premiums or cost sharing as the result of a previous illness or health status, thus ensuring affordable health coverage for those with pre-existing conditions.”

If adopted — which thankfully it was not — this motion would only have entrenched Obamacare further. The pre-existing condition provisions represent the heart of the law, precisely because they have raised premiums so greatly. Those premium increases necessitated the mandates on individuals to buy, and employers to offer, health insurance. They also required the subsidies to make that more-expensive coverage “affordable” — and the tax increases and Medicare reductions needed to fund those subsidies.

More to the point, what would one call a health care proposal that treats everyone equally, and ensures that no one pays more or less than the next person? If this concept sounds like “socialized medicine” to you, you’d have company in thinking so. None other than Kevin Brady denounced Obamacare as “socialized medicine” at an August 2009 town hall at Memorial Hermann Hospital.

All of this raises obvious questions: Why did someone who for years opposed Obamacare as “socialized medicine” offer a proposal that would ratify and entrench that system further?

Republicans like Brady can claim they want to “repeal-and-replace” Obamacare from now until the cows come home, but if they want to retain the status quo on pre-existing conditions then as a practical matter they really want to uphold the law. Conservatives might wonder whether it’s time to “repeal-and-replace” Republicans with actual conservatives.

This post was originally published in the Houston Chronicle.

Bill Clinton’s Right: Pre-Existing Condition Vote IS “The Craziest Thing in the World”

The new House Democratic majority is bringing to the floor a resolution on Wednesday seeking to intervene in Texas’ Obamacare lawsuit. The House already voted to approve the legal intervention, as part of the rules package approved on the first day of the new Congress Thursday, but Democrats are making the House vote on the subject again, solely as a political stunt.

I have previously discussed what the media won’t tell you about the pre-existing condition provisions—that approval of these Obamacare “protections” drops precipitously when people are asked if they support the provisions even if they would cause premiums to go up. I have also outlined how a Gallup poll released just last month shows how all groups of Americans—including Democrats and senior citizens—care more about rising premiums than about losing their coverage due to a pre-existing condition.

Bill Clinton Got This One Right

The current system works fine if you’re eligible for Medicaid, if you’re a lower income working person, if you’re already on Medicare, or if you get enough subsidies on a modest income that you can afford your health care. But the people that are getting killed in this deal are small business people and individuals who make just a little too much to get any of these subsidies. Why? Because they’re not organized, they don’t have any bargaining power with insurance companies, and they’re getting whacked. So you’ve got this crazy system where all of a sudden 25 million more people have health care, and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world.

Why did people “who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half”? Because of the pre-existing condition provisions in Obamacare.

Clinton knew of which he spoke. Premiums more than doubled from 2013 to 2017 for Obamacare-compliant individual coverage, only to rise another 30 percent in 2018. A Heritage Foundation paper just last March concluded that the pre-existing condition provisions—which allow anyone to sign up for coverage at the same rate, even after he or she develops a costly medical condition—represented the largest driver of premium increases due to Obamacare.

The Congressional Budget Office concluded that the law would reduce the labor supply by the equivalent of 2.5 million workers. Because so many people cannot afford their Obamacare coverage without a subsidy now that the law has caused premiums to skyrocket, millions of Americans are working fewer hours and earning less income precisely to ensure they maintain access to those subsidies. Obamacare has effectively raised their taxes by taking away their subsidies if they earn additional income, so they have decided not to work as hard.

Why Do Republicans Support This ‘Crazy’ Scheme?

Given this dynamic—skyrocketing premiums, millions dropping coverage, taxes on success—you would think that Republicans would oppose the status quo on pre-existing conditions, and all the damage it has wrought. But no.

Guarantees no American citizen can be charged higher premiums or cost sharing as the result of a previous illness or health status, thus ensuring affordable health coverage for those with pre-existing conditions.

I’ve said it before, but I’ll say it again: As a matter of policy, any proposal that retains the status quo on pre-existing conditions by definition cannot repeal Obamacare. In essence, this Republican proposal amounted to a plan to “replace” Obamacare with the Affordable Care Act.

Even more to the point: What’s a good definition for a plan that charges everyone the exact same amount for health coverage? How about “I’ll take ‘Socialized Medicine’ for $800, Alex”?

There are better, and more effective, ways to handle the problem of pre-existing conditions than Obamacare. I’ve outlined several of them in these pages of late. But if Republicans insist on ratifying Obama’s scheme of socialized medicine, then they are—to use Bill Clinton’s own words—doing “the craziest thing in the world.”

This post was originally published at The Federalist.

Poll: People Care MORE About Rising Costs Than Pre-Existing Conditions

Now they tell us! A Gallup poll, conducted last month to coincide with the midterm elections and released on Tuesday, demonstrated what I had posited for much of the summer: Individuals care more about rising health insurance premiums than coverage of pre-existing condition protections.

Of course, liberal think tanks and the media had no interest in promoting this narrative, posing misleading and one-sided polling questions to conclude that individuals liked Obamacare’s pre-existing condition “protections,” without simultaneously asking whether people liked the cost of those provisions.

Overwhelming Concern about Premiums

Ironically, a majority of 57 percent said the denial of coverage for pre-existing conditions did not constitute a major concern for them, with only 42 percent agreeing with the statement. Lest one believe that the relative insouciance over pre-existing conditions came because Democrats won a majority in the House, therefore “protecting” Obamacare, Gallup conducted the survey from November 1–11, meaning more than half the survey period came before the American people knew the election outcome.

By comparison, more than three-fifths (61 percent) of respondents viewed rising premiums as a major concern, with only 37 percent not viewing it as such. Not only did premiums register as a bigger concern by 19 percentage points overall, it registered as a larger concern in each and every demographic group Gallup surveyed:

Income under $30,000: +15 percent (70 percent said premiums were a major concern, 55 percent said pre-existing condition coverage was a major concern)

Income between $30,000-$75,000: +19 percent (63 percent premiums, 44 percent pre-ex)

Income above $75,000: +24 percent (57 percent premiums, 33 percent pre-ex)

On Medicare/Medicaid: +16 percent (60 percent premiums, 44 percent pre-ex)

On private insurance: +24 percent (60 percent premiums, 36 percent pre-ex)

Republicans: +25 percent (52 percent premiums, 27 percent pre-ex)

Independents: +19 percent (64 percent premiums, 45 percent pre-ex)

Democrats: +16 percent (68 percent premiums, 52 percent pre-ex)

Aged 18-29: +16 percent (54 percent premiums, 38 percent pre-ex)

Aged 30-49: +23 percent (65 percent premiums, 42 percent pre-ex)

Aged 50-64: +21 percent (67 percent premiums, 46 percent pre-ex)

Aged over 65: +13 percent (57 percent premiums, 44 percent pre-ex)

Men: +18 percent (56 percent premiums, 38 percent pre-ex)

Women: +20 percent (67 percent premiums, 47 percent pre-ex)

With those double-digit margins (i.e., outside the poll’s margin of error) in every demographic group—including among groups more likely concerned about pre-existing conditions, for reasons either practical (i.e., older Americans) or ideological (i.e., Democrats)—Gallup has overwhelming evidence to support its claim that “concerns are greatest about the possibility of having to pay higher premiums.”

Premiums more than doubled from 2013 to 2017, as the law’s major provisions, including the pre-existing condition requirements, took effect. They again rose sharply in 2018, causing approximately 2.5 million individuals to drop their Obamacare-compliant coverage completely.

Not a Surprise Outcome

The Gallup results confirm prior surveys from the Cato Institute, which also demonstrate that support for Obamacare’s pre-existing condition provisions drops dramatically once people recognize the trade-offs—namely, higher premiums and a “race to the bottom” among insurers, reducing access to specialist providers and lowering the quality of care:

But the polling suggests that Democrats have no such mandate, and that they should think again in their approach. Rather than making an already bad situation worse, and potentially raising premiums yet again, they should examine alternatives that can solve the pre-existing condition problem (and yes, it is a problem) by making it easier for people to buy coverage before they develop a pre-existing condition in the first place.

As the polling indicates, the American people—to say nothing of the 2.5 million priced out of the marketplace in the past 12 months—will thank them for doing so.

This post was originally published at The Federalist.

What the Press Isn’t Telling You about the Politics of Pre-Existing Conditions

For months, liberals have wanted to make the midterm elections about Obamacare, specifically people with pre-existing conditions. Of late, the media has gladly played into that narrative.

Numerous articles have followed upon a similar theme: Republicans claim they want to protect people with pre-existing conditions, but they’re lying, misrepresenting their records, or both. Most carry an implicit assumption: If you don’t support Obamacare, then you cannot want to protect individuals with pre-existing conditions, because defending the law as holy writ has become a new religion for the left.

Covering People Before They Develop Conditions

The Kaiser Family Foundation noted in a study earlier this year that the off-exchange individual insurance market shrank by 38 percent in just one year, from the beginning of 2017 to the beginning of 2018. Overall, enrollment in Obamacare-compliant plans for people who do not qualify for income-based subsidies fell by 2.6 million:

Most of these individuals likely dropped their plan because the rapid rise in insurance rates under Obamacare has priced them out of coverage. As a Heritage Foundation study from March noted, the pre-existing condition provisions represent the largest component of those premium increases.

Or consider the at least 4.7 million people who received cancellation notices a few short years ago, because their plan didn’t comport with Obamacare’s new regulations. The father of a friend and former colleague received such a notice. He lost his plan, couldn’t afford a new Obamacare-compliant policy, then got diagnosed with colon cancer. His “coverage” has consisted largely of a GoFundMe page, where friends and colleagues can help his family pay off tens of thousands of dollars in medical debt.

How exactly did Obamacare “protect” him—by stripping him of his coverage, or by pricing the new coverage so high he and his wife couldn’t afford it, and had to go without at the exact time they developed a pre-existing condition?

In fact, by getting politicians of both parties to claim that they want to cover people with pre-existing conditions, this campaign may actually encourage more healthy people to drop their insurance, thinking they can easily buy coverage if they do develop a costly condition.

Obamacare Plans Discriminate Too

The left’s messaging also ignores another inconvenient truth: Because they must accept all applicants, Obamacare plans have a strong incentive to avoid sick people. They can accomplish this goal through tactics like narrow provider networks. Because plans must offer rich benefits and accept all applicants, shrinking doctor and hospital networks provides one of the few ways to moderate premiums. Of course, keeping a clinic like the M.D. Anderson Cancer Center out of one’s network—which all Texas-based Obamacare plans do—also discourages cancer patients from signing up for coverage, a “win-win” from the insurer’s perspective.

Some plans have used more overt forms of discrimination. For instance, in 2014 a group of HIV patients filed a complaint against several Florida insurers. The complaint alleged that the carriers placed all their HIV drugs into the highest formulary tier, to discourage HIV-positive patients from signing up for coverage.

Problem with Pre-Existing Condition Provisions

More than 18 months ago, I wrote that Republicans could either maintain the status quo on pre-existing conditions, or they could repeal Obamacare, but they could not do both. That scenario remains as true today as it did then.

Also true: As long as the pre-existing condition “protections” remain in place, millions of individuals will likely remain priced out of coverage, and insurers will have reason to discriminate against the sick. In fact, the last several years of premium spikes have already turned the exchanges into a de facto high-risk pool, where only the sickest (or most heavily subsidized) patients bother enrolling.

For individuals with pre-existing conditions, there are several—and, in my view, better—alternatives to both the status quo and the status quo ante that preceded Obamacare. But we will never have a chance to have that conversation if few will examine the very real trade-offs the law has created. Based on the past few months, neither the left nor the media appear interested in doing so.

This post was originally published at The Federalist.

Why Smaller Premium Increases May Hurt Republicans in November

Away from last week’s three-ring circus on Capitol Hill, an important point of news got lost. In a speech on Thursday in Nashville, Secretary of Health and Human Services (HHS) Alex Azar announced that benchmark premiums—that is, the plan premium that determines subsidy amounts for individuals who qualify for income-based premium assistance—in the 39 states using the federal healthcare.gov insurance platform will fall by an average of 2 percent next year.

That echoes outside entities that have reviewed rate filings for 2019. A few weeks ago, consultants at Avalere Health released an updated premium analysis, which projected a modest premium increase of 3.1 percent on average—a fraction of the 15 percent increase Avalere projected back in June. Moreover, consistent with the HHS announcement on Thursday, Avalere estimates that average premiums will actually decline in 12 states.

On the other hand, however, given that Democrats have attempted to make Obamacare’s pre-existing condition provisions a focal point of their campaign, premium increases in the fall would remind voters that those supposed “protections” come with a very real cost.

How Much Did Premiums Rise?

The Heritage Foundation earlier this year concluded that the pre-existing condition provisions collectively accounted for the largest share of premium increases due to Obamacare. But how much have these “protections” raised insurance rates?

Overall premium trend data are readily available, but subject to some interpretation. An HHS analysis published last year found that in 2013—the year before Obamacare’s major provisions took effect—premiums in the 39 states using healthcare.gov averaged $232 per month, based on insurers’ filings. In 2018, the average policy purchased in those same 39 states cost $597.20 per month—an increase of $365 per month, or $4,380 per year.

Moreover, the trends hold for the individual market as a whole—which includes both exchange enrollees, most of whom qualify for subsidies, and off-exchange enrollees, who by definition cannot. The Kaiser Family Foundation estimated that, from 2013 to 2018, average premiums on the individual market rose from $223 to $490—an increase of $267 per month, or $3,204 per year.

Impact of Pre-Existing Condition Provisions

The HHS data suggest that premiums have risen by $4,380 since Obamacare took effect; the Kaiser data, slightly less, but still a significant amount ($3,204). But how much of those increases come directly from the pre-existing condition provisions, as opposed to general increases in medical inflation, or other Obamacare requirements?

The varying methods used in the actuarial studies make it difficult to compare them in ways that easily lead to a single answer. Moreover, insurance markets vary from state to state, adding to the complexity of analyses.

However, given the available data on both how much premiums rose and why they did, it seems safe to say that the pre-existing condition provisions have raised premiums by several hundreds of dollars—and that, taking into account changes in the risk pool (i.e., disproportionately sicker individuals signing up for coverage), the impact reaches into the thousands of dollars in at least some markets.

Republicans’ Political Dilemma

Those premium increases due to the pre-existing condition provisions are baked into the proverbial premium cake, which presents the Republicans with their political problem. Democrats are focusing on the impending threat—sparked by several states’ anti-Obamacare lawsuit—of Republicans “taking away” the law’s pre-existing condition “protections.” Conservatives can counter, with total justification based on the evidence, that the pre-existing condition provisions have raised premiums substantially, but those premium increases already happened.

If those premium increases that took place in the fall of 2016 and 2017 had instead occurred this fall, Republicans would have two additional political arguments heading into the midterm elections. First, they could have made the proactive argument that another round of premium increases demonstrates the need to elect more Republicans to “repeal-and-replace” Obamacare. Second, they could have more easily rebutted Democratic arguments on pre-existing conditions, pointing out that those “popular” provisions have sparked rapid rate increases, and that another approach might prove more effective.

Instead, because premiums for 2019 will remain flat, or even decline slightly in some states, Republicans face a more nuanced, and arguably less effective, political message. Azar actually claimed that President Trump “has proven better at managing [Obamacare] than the President who wrote the law.”

Conservatives would argue that the federal government cannot (micro)manage insurance markets effectively, and should not even try. Yet Azar tried to make that argument in his speech Thursday, even as he conceded that “the individual market for insurance is still broken.”

‘Popular’ Provisions Are Very Costly

The first round of premium spikes, which hit right before the 2016 election, couldn’t have come at a better time for Republicans. Coupled with Bill Clinton’s comments at that time calling Obamacare the “craziest thing in the world,” it put a renewed focus on the health-care law’s flaws, in a way that arguably helped propel Donald Trump and Republicans to victory.

This year, as paradoxical as it first sounds, flat premiums may represent bad news for Republicans. While liberals do not want to admit it publicly, polling evidence suggests that support for the pre-existing condition provisions plummets when individuals connect those provisions to premium increases.

The lack of a looming premium spike could also neutralize Republican opposition to Obamacare, while failing to provide a way that could more readily neutralize Democrats’ attacks on pre-existing conditions. Maybe the absence of bad news on the premium front may present its own bad political news for Republicans in November.

This post was originally published at The Federalist.

Politico Reporter’s “Fact Check” of Trump Riddled with Omissions

Who will fact check the fact checkers? That question reared its head again late last week, as a reporter from Politico attempted to add “context” to health-care-related comments the president made at a political rally in Las Vegas. As with Trump himself, what Politico reporter Dan Diamond omitted said just as much as what he included.

During his speech, the president talked about pre-existing conditions, saying Republicans want to “protect patients with pre-existing conditions:”

I’ve previously written about the Obamacare lawsuit in question—why I oppose both the lawsuit, and the Justice Department’s intervention in the case, as unwise judicial activism—and Republicans’ poor response on the issue. But note what neither Diamond nor Trump mentioned: That the pre-existing condition “protections” are incredibly costly—the biggest driver of premium increases—and that, when voters are asked whether they would like these provisions “if it caused the cost of your health insurance to go up,” support plummets by roughly 40 percentage points.

If you need any more persuading that the media are carrying liberals’ water on pre-existing conditions, consider that the Kaiser Family Foundation released their health care tracking survey earlier this month. In it, Kaiser asked whether people are worried that “if the Supreme Court overturns the health care law’s protections for people with pre-existing health conditions you will have to pay more for health insurance coverage.”

The survey didn’t mention that all individuals are already paying higher premiums for those “protections” since Obamacare took effect—whether they want to or not, and whether they have a pre-existing condition or not. In fact, the survey implied the opposite. By only citing a scenario that associates premium rises with a Supreme Court ruling striking down the provisions, Kaiser misled respondents into its “preferred” response.

Then last week, Politico ran another story on the Republican strategy to “duck and cover” regarding the states’ lawsuit, which might of course have something to do with the tenor of Politico’s “reporting” on pre-existing conditions in the first place.

Next, to Single-Payer Proposals

Following the comments about pre-existing conditions, the president then went on the attack, and Diamond felt the need to respond.

Diamond accurately notes that “there is no consensus ‘Democrat plan.’” As the saying goes, the left hand doesn’t always know what the far-left hand is doing. But Trump also made crystal clear what specific Democratic plan he was describing—the single-payer plan written by Sen. Bernie Sanders (I-VT). He even quoted the $32 trillion estimated cost of the plan, as per a Mercatus Center study that became the topic of great dispute earlier this summer.

Here’s what Section 102(a) of Sanders’ bill (S. 1804) says about coverage under the single-payer plan: “SEC. 102. UNIVERSAL ENTITLEMENT. (a) IN GENERAL.—Every individual who is a resident of the United States is entitled to benefits for health care services under this Act. The Secretary shall promulgate a rule that provides criteria for determining residency for eligibility purposes under this Act.”

And here’s what Section 107(a) of the bill says about individuals trying to keep their own health coverage, or purchasing other coverage, to “get out” of the single-payer system:

SEC. 107. PROHIBITION AGAINST DUPLICATING COVERAGE.

(a) IN GENERAL.—Beginning on the effective date described in section 106(a), it shall be unlawful for—

(1) a private health insurer to sell health insurance coverage that duplicates the benefits provided under this Act; or

(2) an employer to provide benefits for an employee, former employee, or the dependents of an employee or former employee that duplicate the benefits provided under this Act.

In other words, the Sanders bill “would force every American on to government-run health care, and virtually eliminate all private and employer-based health care plans”—exactly as the president claimed.

His “most” wording cleverly attempted to elide the fact that the most prominent Democratic plan—the one endorsed by everyone from Sanders to Sens. Elizabeth Warren (D-MA), Cory Booker (D-NJ), Kamala Harris (D-CA), and Kirsten Gillibrand (D-NY), and vigorously pursued by the activist left—does exactly what Trump claimed.

I have little doubt that, had the president inflated the Mercatus study’s estimated cost of Sanders’ single-payer plan—for instance, had Trump said it would cost $42 trillion, or $52 trillion, instead of using the $32 trillion number—Diamond (and others) would have instantly “fact checked” the incorrect number. Given that Diamond, and just about everyone else, knew Trump was talking about the single-payer bill, this so-called “fact check”—which discussed everything but the bill Trump referenced—looks both smarmy and pedantic, specifically designed to divert attention from the most prominent Democratic plan put forward, and Trump’s (accurate) claims about it.

Medicare Benefits Not Guaranteed

Ironically, if Diamond really wanted to fact check the president, as opposed to playing political games, he had a wide open opportunity to do so, on at least two levels. In both cases, he whiffed completely.

In the middle of his riff on single-payer health care, President Trump said this: “Robbing from our senior citizens—you know that? It’s going to be one of the great catastrophes ever. The benefits—they paid, for their entire lives—are going to be taken away.” Wrong, wrong, wrong.

Politicians can claim all they want that people “paid into” Medicare to get back their benefits, but it isn’t true. The average senior receives far more in benefits than what he or she paid into the system, and the gap is growing. Medicare’s existing cash crunch makes a compelling case against expanding government-run health care, but it still doesn’t mean that seniors “paid for” all (as opposed merely to some) of the benefits they receive.

Second, as I have previously noted, Sanders’ bill is not “Medicare-for-all.” It’s “Medicare-for-none.” Section 901(a)(1)(A) of the bill would end benefits under the current Medicare program, and Section 701(d) of the bill would liquidate the existing Medicare trust fund. If seniors like the Medicare coverage, including the privately run Medicare Advantage plans, they have now, they would lose it. Period.

To sum up, in this case Politico ignored:

  1. The cost of the pre-existing condition “protections”—how they raise premiums, and how Obamacare advocates don’t want to mention that fact when talking about them;
  2. The way that the most prominent Democratic health care bill—the one that President Trump very clearly referred to in his remarks—would abolish private coverage and force hundreds of millions of individuals on to government-run health care;
  3. Inaccurate claims President Trump made about seniors having “earned” all their Medicare benefits; and
  4. The fact that Sanders’ bill would actually abolish Medicare for seniors.

And people say the media have an ideological bias in favor of greater government control of health care. Why on earth would they think that?

This post was originally published at The Federalist.

Do Democrats Want Obamacare to Fail under Donald Trump?

In their quest to take back the House and Senate in November’s midterm elections, Democrats have received a bit of bad news. The Hill recently noted:

Health insurers are proposing relatively modest premium bumps for next year, despite doomsday predictions from Democrats that the Trump administration’s changes to Obamacare would bring massive increases in 2019. That could make it a challenge for Democrats looking to weaponize rising premiums heading into the midterm elections.

Administration officials confirmed the premium trend last Friday, when they indicated that proposed 2019 rates for the 38 states using healthcare.gov averaged a 5.4 percent increase—a number that may come down even further after review by state insurance commissioners. So much for that “sabotage.”

The messaging strategy once again illustrates the political peril of rooting for something—particularly legislation Democrats worked so hard to enact in the first place—to fail on someone else’s watch. Like officials accused of “talking down the economy” so they can benefit politically, Democrats face the unique task of trying to talk down their own creation, while blaming someone else for all its problems.

The Obamacare Exchanges’ Prolonged Malaise

While Obamacare hasn’t failed due to President Trump, it hasn’t succeeded much, either. Enrollment continues to fall, particularly for those who do not qualify for subsidies. Two years ago—long before Donald Trump had any power to “sabotage” Obamacare as president—Bill Clinton called Obamacare “the craziest thing in the world” for these unsubsidized persons, and their collective behavior demonstrates that fact.

A recent study from the liberal Kaiser Family Foundation concluded that, away from Obamacare exchanges, where individuals cannot receive insurance subsidies, enrollment fell by nearly 40 percent in just one year, from the first quarter of 2017 to the first quarter of this year. However, the rich subsidies provided to those who qualify for them—particularly those with incomes below 250 percent of the federal poverty level, who receive reduced cost-sharing as well—strongly encourage enrollment by this population, making it unlikely that the insurance exchanges will collapse on their own.

President Trump can talk all he wants about Obamacare imploding, but so long as the federal government props tens of billions of dollars into the exchanges, it probably won’t happen.

Good Reasons for Premium Moderation

Those premium subsidies, which cushion most low-income enrollees from the effects of premium increases, coupled with a lack of competition among insurers in large areas of the country, have allowed premiums to more-or-less stabilize, albeit at levels much of the unsubsidized population finds unaffordable. Think about it: If you have a monopoly, and a sizable population of individuals either desperate for coverage (i.e., the very sick) or heavily subsidized to buy your product, it shouldn’t take a rocket scientist to break even, much less turn a profit.

As a recent Wall Street Journal article notes, insurers spent the past several years ratcheting up premiums, for a variety of reasons: A sicker pool of enrollees than they expected when the exchanges started in 2014; a recognition that some insurers’ initial strategy of underpricing products to attract market share backfired; and the end of Obamacare’s “transitional” reinsurance and risk corridor programs, which expired in 2016.

While some carriers have adjusted 2019 premiums upward to reflect the elimination of the individual mandate penalty beginning in January, some had already “baked in” lax enforcement of the mandate into their rates for 2018. Some have long called the mandate too weak and ineffective to have much effect on Americans’ decision to buy coverage.

It Could Have Been Worse?

Liberals have started to make the argument that, but for the Trump administration’s so-called “sabotage” of insurance markets, premiums would fall instead of rise in 2019. (Some insurers have proposed premium reductions regardless.) The Brookings Institution recently released a paper claiming that in a “stable policy environment” without repeal of the mandate, or the impending regulatory changes regarding short-term insurance and Association Health Plans, premiums would fall by an average of approximately 4.3 percent.

But as the saying goes, “‘It could have been worse’ isn’t a great political bumper sticker.” Democrats tried to make this point regarding the economic “stimulus” bill they passed in 2009, after the infamous chart claiming unemployment would remain below 8 percent if the “stimulus” passed didn’t quite turn out as promised:

In 2011, House Minority Leader Nancy Pelosi (D-CA) tried to make the “It could have been worse” argument, claiming that unemployment would have risen to 15 percent without the “stimulus”:

But even she acknowledged the futility of giving such a message to the millions of people still lacking jobs at that point (to say nothing of the minor detail that studies reinforcing Pelosi’s point didn’t exist).

There’s No Need for a Bailout

While the apparent moderation of premium increases complicates Democrats’ political message, it also undermines the Republicans who spent the early part of this year pressing for an Obamacare bailout. Apart from the awful policy message it would have sent by making Obamacare’s exchanges “too big to fail,” such a measure would have depressed turnout among demoralized grassroots conservatives who want Congress to repeal Obamacare.

As it happens, most state markets didn’t need a bailout. That’s a good thing on multiple levels, because a “stability” bill passed this year would have had little effect on 2019 premiums anyway.

That said, if Democrats want to make political arguments about premiums in this year’s elections, maybe they can tell the American people where they can find the $2,500 in annual premium reductions that Barack Obama repeatedly promised would come from his health care law. Given the decade that has passed since Obama first made those claims without any hint of them coming true, trying to answer for that broken promise should keep Democrats preoccupied well past November.

This post was originally published at The Federalist.