Yes, Obamacare Rate Hikes Do Hurt People with Employer Plans
David Catron
by

Among the most frequently repeated talking points promulgated by the White House and its media allies about Obamacare’s latest premium spikes is that they only affect the “small” number of people who buy coverage on the individual market, leaving those with employer-based coverage unscathed. The New York Times dutifully parrots the party line, “These increases really matter only for those who buy their own insurance.” This is just another in the long list of lies the law’s apologists have told to save the President’s “signature domestic achievement.” In reality, this premium spike will adversely affect the lives of 177 million Americans.

But before we get to the people with job-based coverage, let’s take a look at the actual Americans the Times so lightly dismisses as insignificant. The Kaiser Family Foundation estimates that 21.8 million individuals “purchased or are covered as a dependent by non-group insurance.” In other words, these gigantic premium spikes “really matter only” to a number of people equivalent to the combined populations of these 16 states — Alaska, Delaware, Hawaii, Idaho, Maine, Montana, Nebraska, New Hampshire, New Mexico, Nevada, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming.

One can certainly see why neither the Obama administration nor the media would worry about such a paltry number of people. Besides, Secretary of Health & Human Services Sylvia Burwell assures us that “85 percent of Americans impacted by the increases will be eligible for subsidies.” The problem with that rosy figure is that it fails to include people who buy coverage outside Obamacare’s “marketplaces.” If an individual’s income exceeds 400 percent of federal poverty guidelines, he doesn’t qualify for a subsidy. Thus, millions of Americans ignore the exchanges, meaning that Secretary Burwell’s subsidy claim is fiction.

A more plausible estimate is that about half of the people who buy individual coverage will receive subsidies. But these subsidies don’t fall from Heaven like so much manna. They are paid by the taxpayers. In other words, all those Americans with employer-based health insurance who are being told by the Obama administration and the “news” media that the impending premium spike won’t affect them will actually have to foot the bill. A portion of their federal tax payments will be used to pay the subsidies. And it’s not small change. The Congressional Budget Office estimates that the subsidies will total $672 billion over the next 10 years.

For the 156 million Americans with employer-based health coverage, this comes on top of increases in their own out-of pocket health expenses that can be directly attributed to the “Affordable Care Act.” Most lost their pre-Obamacare insurance plans, despite the President’s assurances, because their coverage didn’t include the minimum essential benefits mandated by the law. Their insurers attempt to keep premiums as low as possible, but can only do so by increasing plan deductibles. These workers are thus paying more for their own health care while their taxes subsidize skyrocketing premiums on plans sold through the exchanges.

Predictably, Obamacare’s apologists studiously ignore such inconvenient realities, while frantically revising history concerning the purpose and effects of “reform.” Some legacy media outlets were so desperate to explain away the blindingly obvious that they exhumed some of the law’s original architects to refute the facts. The editors of the Washington Post, for example, trotted out Ezekiel “I want to die at 75” Emanuel. The good doctor dutifully advised the Post’s readers to hark back to the deplorable conditions that prevailed during the Bush years. I’m not kidding. Eight years after Barack Obama was elected President, Emanuel writes:

While health-care costs and premiums are rising — the recent announcement notwithstanding — they are rising much more slowly than they did during the George W. Bush administration.… For instance, from 2001 to 2005, per-person health-care spending rose an average of more than 7 percent per year … Conversely, from 2011 to 2015, per-person costs rose an average of just 3.4 percent per year.

Emanuel employs two profoundly disingenuous rhetorical tricks here. First, he shamelessly cherry picks his data, including two years from the Bush era that he knew to be atypical and would skew the averages upward for that period. Second, he compares them to a trend during the Obama years that could not have been caused by the Rube Goldberg “reform” scheme he helped design. The genuine history of “per-person health care spending,” as this CMS report will confirm, is that a long-term decline began in 2003 and continued through 2013. Not coincidentally, this trend ended in 2014, with Obamacare’s incompetent rollout.

As to the plight of those with employer-based coverage, Emanuel uses another gambit much beloved of Obamacare apologists, comparing its performance to an unknowable alternate reality: “Premiums for employment-based coverage will be 10 to 15 percent lower in 2025 than they would have been without the ACA.” This BS may sell inside the Beltway, but among the people who must live with the pig’s breakfast Emanuel and his accomplices made of reform, no one’s buying. Obamacare is harming individuals who buy coverage through its crumbling exchanges as well as those covered via their jobs. It’s long past time to stop the madness.

David Catron
David Catron
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David Catron is a health care consultant and frequent contributor to The American Spectator. You can follow him on Twitter at @Catronicus.
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