Open Enrollment Is A Warning, Not A Cause For Celebration

Obamacare's open enrollment period kicks off this week. Each year around this time, the Affordable Care Act's defenders mobilize to tout its supposed benefits and to encourage people to purchase coverage on the exchanges it created. From the halls of Congress to the White House, we can expect to see Democrats singing Obamacare's praises in the weeks to come.

Unfortunately, no amount of spin can obscure the fact that Obamacare is failing. Contrary to its name, the "Affordable" Care Act is quite expensive—to enrollees and taxpayers alike. And it hasn't done much to improve the health insurance marketplace.

Let's recall how things looked during the first open enrollment period, 10 years ago this fall for coverage that took effect at the beginning of 2014.

 The average unsubsidized monthly Obamacare premium in 2014 was $352, $110 more per month than the year prior. By 2019, monthly premiums were $589 a month. Things began to settle a bit after that, and this year, the average unsubsidized Obamacare plan cost $560 per month.

Of course, these are just the "unsubsidized" numbers. Since its inception, Obamacare has masked its surging premiums with increasingly generous subsidies courtesy of John Q. Public.

Subsidies have become such an integral part of Obamacare that the program's supporters now boast about them as if they were an innovation to be celebrated, not a desperate stopgap—and an expensive one to boot!

Last year, President Joe Biden proudly said that Americans could purchase health insurance for "$10 a month or less" thanks to the enhanced subsidies provided by the Inflation Reduction Act.

The tab for those enhanced subsidies? A cool $30 billion in 2022—on top of the $60 billion in legacy subsidies established by Obamacare. If left untouched, the enhanced subsidies alone will cost Americans more than $305 billion by 2032—and raise the federal deficit by nearly $250 billion.

The price of insurance has surged because of Obamacare's cost-inflating mandates and regulations.

Spending billions in taxpayer dollars to cover up such cost increases is like spilling a glass of red wine on a clean white carpet and boasting that you laid newspaper down to cover the stain. It's absurd—and it doesn't do anything to fix the underlying problem.

There's the list of 10 "essential health benefits" that every exchange plan is required to cover. This rule prevents insurers from offering less comprehensive coverage at a lower price point.

There's Obamacare's requirement that insurers sell to all comers, regardless of health status or history, and that they cap premiums for the old at three times those for the young. As a general rule, older people have higher health expenses than younger ones. Indeed, people between the ages of 55 and 64 account for 21% of health expenses but just 13% of the population. So it's a safe bet that younger people are paying more for coverage than they would in a freer market.

Despite these eye-popping costs, exchange coverage is of relatively low quality. The average deductible for a mid-level silver plan was just under $5,000 in 2023, up from just over $2,400 in 2014. Some three-quarters of Obamacare plans come with narrow networks, according to a recent report from Avalere Health. Enrollees in these plans have too few choices of covered providers and often struggle to find a doctor who takes their insurance.

All this spending—and all this disruption in the insurance market—hasn't actually accomplished much. A new paper from Daniel Cruz and Greg Fann of the Paragon Institute found that enrollment in private insurance in 2021 was essentially the same as pre-Obamacare levels. Moreover, the study showed that of the 19 million people who gained coverage through the Affordable Care Act, 17.4 million did so as a result of Medicaid expansion.

It's been more than a decade since Obamacare promised to revolutionize the health insurance market. It failed—and taxpayers and shoppers in the individual market are paying the price.

Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute.

https://www.forbes.com/sites/sallypipes/2023/10/30/open-enrollment-is-a-warning-not-a-cause-for-celebration/