The Right Prescription

Uninsured: Obamacare Is Unaffordable

The premiums are too high.

By 3.10.14

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A new survey confirms that the “Affordable Care Act” has failed to achieve one of its most important goals — making health coverage accessible to the uninsured. As the Washington Post reports, “Just one in 10 uninsured people who qualify for private health plans through the new marketplace have signed up for one.” Why so few? According to the survey, which was released last Thursday by McKinsey & Company, the most common reason cited by uninsured respondents was lack of affordability. Out of five possible reasons for failing to enroll, most chose, “I could not afford to pay the premium.”

The irony of this is mindboggling. For years, the advocates of Obamacare characterized the uninsured problem as a human tragedy that bankrupted millions and killed tens of thousands. The latter claim was injected into the health reform debate by a notoriously disingenuous study whose authors claimed that lack of health coverage caused the untimely demise 45,000 Americans per year. This “research” was debunked by various health policy experts, but that didn’t stop Democrats from quoting it in Congress to show that Republican opposition to Obamacare was tantamount to genocide.

In fact, as recently as December of last year, the President was still peddling this whopper in an attempt to convince an increasingly skeptical electorate that his rapidly disintegrating health care “reform” program had made America a better place: “We believe we’re a better country than a country where… every year, tens of thousands of Americans died because they didn’t have health care.” If Obama actually believes the lack of insurance kills this many people, it’s a little difficult to see how he can maintain that Obamacare has “fundamentally transformed” the United States into a healthier and happier place.

The answer, of course, is that actual facts have little to do with the claims the President makes for Obamacare. It’s pretty obvious, for example, that the 4 million sign-up figure touted by his administration is fiction. The McKinsey survey makes it clear that the actual number is less than 500,000. The reality is that Obama’s health care bureaucrats aren’t bothering to track how many uninsured are obtaining coverage via Obamacare. When asked for that figure, the government official charged with implementing the program said, “That’s not a data point that we are really collecting in any systematic way.”

That’s right. The plight of the uninsured was a major selling point for the passage of Obamacare, and the law’s advocates claimed the lack of insurance was killing more people annually than automobile accidents. The Grim Reaper was mowing down uninsured Americans in their thousands, yet no one has bothered to ascertain if the President’s “signature domestic achievement” has reduced the carnage? There are only two possible interpretations of this revelation: (1) The Obama administration is incompetent beyond our scariest nightmares or (2) the uninsured problem was always a hoax.

The latter is the obvious explanation. Obamacare’s advocates claimed that there were 47 million uninsured Americans. As far back as 2008, Sally Pipes explained in the Washington Times why that was a bogus figure: “The [Census] Bureau counts anyone who went without health insurance during any part of the previous year as ‘uninsured.’” Anyone without coverage for a single day was counted in the 47 million. Pipes went on to point out that this figure included 10 million illegal immigrants, 14 million people already eligible for government assistance, and about 10 million making more than $75,000 annually.

In other words, the actual number of Americans who were involuntarily uninsured was, at worst, somewhere around 13 million. And it is a myth that these people were ever denied care. This is why HHS isn’t keeping up with the number of uninsured who are signing up through the exchanges. The plight of the uninsured was a phony issue. A genuine issue, on the other hand, was increasing insurance premiums. And, perversely, the authors of Obamacare never addressed the underlying causes of this problem. In fact, the ironically named Affordable Care Act actually exacerbated the cost problem.

Obamacare nationalized a variety of ill-conceived ideas that had been shown to drive up premiums at the state level. The worst of these were minimum essential coverage and the guaranteed issue requirement. “Minimum essential coverage” is a euphemism for benefit mandates. Five years ago, I explained in this space why such mandates have driven up premiums everywhere they have been imposed. Obama has decided to delay the implementation of this provision until after the upcoming midterms, but this was done after the health insurance carriers had calculated rates based on the requirement.

Thus, the high premiums cited by uninsured participants in the McKinsey survey are consistent with what they can expect when the minimum coverage provision becomes more politically convenient. Exacerbating the premium hikes caused by that provision is Obamacare’s requirement that insurers cover all comers. As far back as October of 2009, PriceWaterhouseCoopers (PwC) produced a report indicating that “a weak individual coverage requirement, coupled with a strong guaranteed issue requirement and no pre-existing limits” would assure dramatic increases in premiums.

Predictably, the White House and the legacy media denounced the report and vilified PwC. Nonetheless, these components of Obamacare are having precisely the effect on premiums that PwC predicted. So, however many uninsured individuals there are out there, they have less incentive to buy coverage than ever. To remain uninsured costs them virtually nothing and they can get insurance with no questions asked if they need it. So, the only surprising thing about the McKinsey survey is that it surprised anyone.

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About the Author

David Catron is a health care consultant. He has an MBA from the University of Georgia and blogs at Health Care BS.