Obamacare Is A Money Pit
August 22, 2016
When Obamacare was created, it was sold to the American people as a new plan to both lower health costs and expand access. Six years later, many Americans have faced and continue to face outrageous premiums and deductibles. Instead of expanding competition and access, the recent announcement that Aetna would be withdrawing from Obamacare on the heels of United’s announcement that they would also be withdrawing from the exchanges should force us to reevaluate whether, in fact, Obamacare is everything it was promised, particularly from a financial perspective.
In Oklahoma, families have faced massive rate increases, thanks to Obamacare. In 2015, the average premium increase for a policy was 12.2 percent—but that was with 4 carriers in the marketplace. In 2016, because of the rationing of care, the increased bureaucratic morass and additional mandates, and the outrageous costs, half of the insurers exited the marketplace, leaving two insurers, and Oklahomans with an average 31 percent increase over the previous year. 2017 is no better, as UnitedHealth exits the market, leaving just one carrier, and leaving families with another, average proposed premium increase of 49.2 percent. Premiums have more than doubled in just three years.
Beyond its impact on families, Obamacare has had a tremendous negative impact on the federal budget, all while health care costs continue to rise. In fact, CMS continues to project an average yearly increase of 5.8% on healthcare spending through 2024. Since its implementation, it has been a burden on a family’s budget, as well as on the federal budget. According to the Congressional Budget Office, the subsidies alone for Obamacare will cost the federal government more than $853 billion in the next ten years. These strains on our families and our national economy are unsustainable.
While Obamacare continues to drain the pockets of many families, and of the federal government, it is certainly draining the pockets of health insurers. Major health insurance company Aetna is just one of the latest companies to recognize the fundamental flaws that face Obamacare. Aetna revealed that its participation in Obamacare has cost them upwards of $430 million since 2014. Similarly, UnitedHealth lost nearly $1 billion in Obamacare-compliant plans in the last two years. Such losses are unsustainable and lead to consolidation, like Aetna’s attempted merger with Humana. Unfortunately, the Department of Justice blocked this merger, which hastened the exit of Aetna from the marketplace.
It is not hyperbole to say that Obamacare has effectively destroyed the health care system as we knew it. It will be hard to undo what has been done. When you burn the house down it can’t simply be undone – you have to build a new house. Fortunately, Republicans have a free market, consumer driven alternative that will restore choice, foster competition, and make access to quality health care easy and affordable for all Americans. It will be a system that will create ease of mind for both the consumer and the insurer, and provide continued protection for all levels of the system. It will lower costs by ending cumbersome mandates and reducing the trillions of dollars in new taxes on health care. Replacing the system will reduce the financial strains on every participant in the system. As we provide more choices, and free market solutions, we will provide security and assurance to all who participate.