Tonight, I have for you ‘A Tale of Two Obamacares.
The first, as told by the Obama administration: It was the best of times. The Obamacare exchanges are stable, the administration has proclaimed. More young healthy people have enrolled. As a result, the average cost of an Obamacare enrollee stayed flat between 2014 and 2015, while the average cost per enrollee went up three percent in the wider market. This means there is a broader, healthier risk pool in the Obamacare exchanges and that is really encouraging and exciting news, CMS says. Except it’s all guesswork. The risk pool has not substantially improved, one expert says. Costs per enrollee are not coming down, as the administration said they would when the sickest got the care they needed. Besides, the data is a year old, so we don’t know what happened in terms of average costs this year. Also, you don’t hear insurers saying, ‘Gee, costs are stabilizing. Guess we don’t need those 40 percent increases after all.’ The administration is obviously seizing on any number it can, to make things look good. It’s easy to make fun of their rosy outlook, given the scores of stories about premium increases and insurers leaving the exchanges. But the real take-away is that the administration is finally admitting that Obamacare can’t work without shafting young people, something us Tea Partiers knew a long time ago.
Now for the second tale. It was the worst of times. The next President might have to deal with an Obamacare meltdown in the very first month of a new administration. Sign-ups begin right before the election and end right before the inauguration. Last year, only 11 million people signed up for Obamacare – and not all of them paid their first premium. That’s far lower than the Obama administration’s initial boast that 21 million people would sign up, and far lower that what some experts say is needed to sustain the marketplace. So far, young people have stayed away in droves, leaving the risk pool much older and sicker than the administration represented when it was selling us this bilge. Many insurers have already called it quits after seeing the real world results and others are expected to leave if there isn’t a big bump in enrollment this time around. Meanwhile, the risk corridor subsidies for insurers haven’t materialized. Profitable companies were supposed to give money to unprofitable companies, but that’s hard to do when most of them are losing money. Right now, all five top insurers in the Obamacare exchanges say they are losing money on Obamacare plans. “We’re basically seeing the exchanges unravel,” one expert says, while another says the insurance companies are just posturing, hoping to get more subsidies out of Washington.
Epilogue: The administration can spin the numbers any way it wants, but ask yourself this question: If things are going so great on the Obamacare exchanges, why is the administration now asking states to kick in their own money and start reinsurance programs to subsidize the insurers themselves? That sounds like an admission to me that Washington can’t save Obamacare and we need the states to do it. I don’t have a crystal ball, but good luck with that.
Links
“Next president faces possible ObamaCare meltdown”
http://thehill.com/policy/healthcare/291056-next-president-faces-possible-obamacare-meltdown
“Feds: Early ObamaCare data ‘encouraging’”
http://thehill.com/policy/healthcare/291156-feds-early-obamacare-data-as-encouraging
O-admin : Obamacare has failed. Please, pretty please, states, create your own reinsurance programs to subsidize insurers.
http://www.forbes.com/sites/brucejapsen/2016/08/14/how-the-white-house-aims-to-push-obamacare-risk-onto-states/#11b57c086d07