Tuesday, December 30, 2014

ACA is Not Affordable | 87% Need Federal Aid for Premiums | Ultimately Care Will Need to Be Rationed | 2017 Price Shock Looms

The news cycle is markedly slower over the holidays.  But unlike most of the world, the joy of Obamacare doesn't vacation.  There have been a number of developments since Christmas that, when pieced together, paint a not-so-festive picture of Health Reform's overall affordability.  The first comes to us from Paul Bedard at the Washington Examiner
87% of people who just signed up for Obamacare are getting financial assistance to lower their premiums, according to the Department of Health and Human Services. 
That is a jump from 80% during the last open enrollment period. 
The department did not say how much it was offering to new Obamacare enrollees or what the total bill to taxpayers would be. 
Just a wee bit ironic for a law labeled as the Affordable Care Act, don't you think?  But lets give the benefit of the doubt to its drafters and assume that affordability was meant to be adjudicated after the receipt of federal tax dollars.

In fact, premiums are affordable for many folks at or under 2.5 times the federal poverty level.  But then we must look to the law's affordability at the point of care and how well healthcare users can rely on PPACA insurance to get them the services they need.  That points us to the latest from Obamacare designer, Professor Jonathan Gruber, as reported in the Daily Caller by Patrick Howley:
President Obama’s health care adviser Jonathan Gruber said that the Affordable Care Act would definitely not be affordable while he was writing the bill with the White House.... 
Gruber said that Obamacare had no cost controls in it and would not be affordable in an October 2009 policy brief.... At the time, Gruber had already personally counseled Obama in the Oval Office and served on Obama’s presidential transition team. Obama, meanwhile, told the American people that their premiums would go down dramatically. ... 
Gruber also said that the only way to control costs is to effectively deny treatment.  
“The real substance of cost control is all about a single thing: telling patients they can’t have something they want. It’s about telling patients, ‘That surgery doesn’t do any good, so if you want it you have to pay the full cost.’”
Ah, there is nothing like a lump of denial in your Christmas stocking.  And as to the future affordability of PPACA, this is from Stephen Parente, health finance professor at the University of Minnesota, as summarized by the NCPA:
[P]remiums are lower than they would otherwise be because of two temporary Obamacare programs that help insurers keep costs down. But those programs expire in 2017, and that's when ... big rate hikes will come.   
Risk corridors and reinsurance are two Obamacare programs that are slated to run through 2016. Risk corridors transfer funds to insurers whose costs are higher than expected, while reinsurance compensates insurers whose enrollees have medical costs above $45,000 in a single year.... 
According to ... research [from] the University of Minnesota, premiums after 2016 will increase quickly, especially for cheaper plans. Bronze family plans could rise by 45% (from $9,000 to $13,000) while individual plans could skyrocket by 96% (from $2,000 to $4,000).... [ultimately resulting in an] uninsured rate could reach 40 million within 10 years -- 10% higher than the uninsured rate today.