Obamacare Fails to Deliver Affordability

by John M. Curtis
(310) 204-8700

Copyright August 21, 2013
All Rights Reserved.                                      

             Approaching the Oct. 1 deadline to implement Obamacare, there are real signs that the President’s 2010 Patient Protection and Affordable Care Act has done exactly the opposite, made it more costly to pay for health insurance.  Announcing that they’d drop spousal coverage on current health plans, the University of Virginia and United Parcel Service signaled they’d drop spousal coverage for individuals eligible for Obamacare.  Claiming the changes were needed to offset an estimated $7.3 million increase to UVA’s costs of insuring employees under provisions of Obamacare.  “But we must make adjustments or face millions of dollars in rising costs, fees and taxes that would be passed along to employees,” said UVA’s Vice President and Chief Human Resources Officer Susan Carkeek in a press release.  Anticipating rising costs to Obamacare plans has given House Republicans more reason to de-fund the plan.

             When President Barack Obama and the Democratically-controlled Senate passed the Patient Protection and Affordable Care Act [60-39] Dec. 23, 2009, it paved the way for the House to approve the Senate Bill March 21, 2010 [216-219], getting Obama’s signature March 23, 2013.  House and Senate Republicans opposed the plan largely on partisan votes with independents helping push the bill to passage.  Republicans felt railroaded into passing Obamacare, fearing the eventual nightmare of rising health care costs.  Rising health care costs “combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable costs,” said UPS, attesting to how the White House failed to rein in the nation’s biggest insurers from gouging consumers and raising premiums.

             Since early implementation of Obamacare in 2010-2013, health insurers have continues to hike premiums anticipating greater costs of Obamacare.  As of Sept. 23, 2010, insurers were required to end lifetime caps, include dependents up to age 26 and, most importantly, stop exclusions for pre-existing conditions, preventing self-insured individuals from procuring affordable health insurance.  Since these and other reforms went into effect, the White House had done nothing to stop insurers from raising premiums to accommodate any rise in expected benefit payouts.  Republicans on the House Energy and Commerce Committee have cited UPS and UVA’s complaints to urge House colleagues to force a government shutdown in September to prevent the Oct. 1 Obamacare implementation date for buying Obamacare policies from state-sponsored insurance exchanges.

             Without preventing insurers from raising premiums, the policies expected on the exchanges will lack the affordable price tag promised by the Obama administration.  “American families who are already grappling with higher health care costs under the law are also coming face-to-face with the stark reality that the will lose the coverage they have and like,” said a statement from House Energy and Commerce Committee.  Unable to control insurers from raising premiums to assure their bottom lines, the White House has failed in a major promise of the Affordable Care Act:  Guaranteeing coverage and lowering premiums.  If companies like UPS decide to start cutting spousal coverage, the White House has a big problem implementing the law.  Spending so much time on individual compliance, the White House forgot that the employer-based health care system must also cooperate.

             No company should be allowed under federal law to cut off dependents or spouses from coverage.  Instead of allowing insurers to raise premiums, the government must have a provision for stopping insurers from hiking rates.  Whether they’re paying more for Obamacare policies or not, insurers must provide an objective analysis of what percentage of Obamacare policies cost the companies more in benefits.  Unless insurers can prove they’ve actually paid out more in benefits, they should not be permitted to raise premiums without stiff penalties.  Companies that can show proof of higher expense ratios, the government should consider subsidizing insurers to a point.  No insurer should clean-up off Obamacare, actually raise profit margins and earnings at the expense of the government or consumers.  Without safeguards against price-gouging, the government can’t stop unwarranted price hikes.

             Less than two months away from selling Obamacare policies, the White House needs to go back to the drawing board to figure out how to prevent insurers from gouging consumers.  “The health care law will make health insurance more affordable, strengthen small businesses and make it easier for employers to provide coverage to their workers,” said Department of Health and Human Services spokeswoman Joanne Peters.  When Obama asks Congress for an extension of the debt ceiling to keep the government running in September, House Republicans led by Minority Leader Eric Cantor (R-Vir.) have urged House Speaker John Boehner (R-Ohio) to let the government default to prevent Obamacare from implementing Oct. 1.  If the White House can’t figure out a way to prevent insurers from hiking premiums and gouging consumers on Obamacare, de-funding might be considered a legitimate option.

John M. Curtis writes politically neutral commentary analyzing spin in national and global news.  He's editor of OnlineColumnist.com.and author of Dodging the Bullet and Operation Charisma.