Taxpayer largess is keeping ObamaCare’s federal exchanges afloat. We’ve always made this argument and now the Administration is confronted with this truth by an independent study that it commissioned.
Some 80 percent of ObamaCare enrollees utilize “free money” to subsidize the costs of their “affordable” healthcare coverage through ObamaCare. However, without those subsidizes costs for premiums would rise by 43.4 percent and enrollment would fall by an astounding 68 percent leaving 11.3 million more Americans uninsured, according to a new study from consulting from RAND Health.
The report confirms that eliminating the Affordable Care Act's tax credits and eliminating the individual mandate both increase premiums and reduce enrollment on the individual market
This is critically important as the Supreme Court may decide next year whether the federal subsidies are unconstitutional because the text of the ACA allows taxpayer premium subsidies for state exchanges only – not the federal exchange.
The Daily Caller reports:
… The report was sponsored by HHS’s Office of the Assistant Secretary for Planning and Evaluation, which, among other duties, compiles the enrollment statistics each month during open enrollment for Obamacare exchanges. Given the ongoing controversy over Obamacare subsidies, HHS sponsoring the study could be a sign that the administration is beginning to worry about its prospects.
…“In scenarios in which the tax credits are eliminated, our model predicts a near ‘death spiral,’ with very sharp premium increases and drastic declines in individual market enrollment,” the study concluded.
Obamacare supporters will tout that well-intentioned premium subsidies are working. But if the health-care law can’t survive without taxpayers supporting Obamacare enrollees, the point remains that the Affordable Care Act is failing in its promise to control the actual cost of health care and health insurance.
The study also discovered that apart from premium subsidies and the individual mandate, the presence of young adults also plays a role in keeping the cost of exchange coverage down. For every 1 percentage point reduction in the share of young adult enrollees in the individual market, RAND expects a 0.44 percent increase in premiums.
…The individual mandate, for one, has been upheld by the highest courts, but taxpayer subsidies in federally-run exchanges — which accounts for over 5 million out of 7.3 million enrollees — are still facing serious legal challenges. If the Obama administration fails to uphold its position, it could put the exchanges in an extremely precarious position.
This is bad news for the President and his namesake law. However, it only confirms what so many of us, who have challenged ObamaCare on substantive grounds, have argued.
The rollout and PR campaigns around the un-Affordable Care Act just scratch the surface of the problems with ObamaCare. The fundamental issues have to do with the individual and employer mandates which require people to take action that increases their own costs and costs of doing business. That taxpayers must then also subsidize the costs of what should be affordable plans is a market distortion that shields that real costs to consumers.
ObamaCare has always been a bad deal for Americans –especially young, healthy Americans who are caught up in yet another generational theft scheme to redistribute our (limited) earnings by no choice of our own.
ObamaCare is neither affordable nor real reform for the healthcare industry. It’s just another behemoth government experiment rife with broken promises, and leaving hardship in its path.