Tuesday, November 3, 2015

What We Know and Don’t Know about ObamaCare

It’s not what you know. It’s what you don’t know that counts. You may know the present, but you don’t know the future.

So spoke Doug Badger, retired White House and Senate advisor and now senior fellow at the Galen Institute, a non-profit think tank, in Part I and Part II of a Galen Institute report.

Part 1 – What We Know Is.

1. Fewer are uninsured. We don’t know how many exactly but it’s in the 10.5 million to 17.6 million range.

2. Most newly insured people have gained coverage through Medicaid, not the exchanges. In all, 97% of net increase was accomplished by Medicaid.

3. ObamaCare is good deal for uninsured with pre-existing conditions and those with incomes of 200% below federal poverty line ($23,540 for individuals and $40,180 for family of 3). 86% of these receive federal subsidies.

4. Subsides can land you in trouble with the government. Premiums subsidies vary with incomes. If your income goes up by $1000, you have to pay hundreds more dollars for insurance. If you misrepresent your income increase or don’t report it, the government cuts off your subsidies.

5. ObamaCare is bad for most uninsured with incomes great than 200% of federal poverty line. You are not eligible for subsidies, and you enroll in an ObamaCare plan, it will cost you much more than paying $695 for not having a plan. Increased premiums and deductibles and out of pocket expenses will cost you a bundle. If you are in the lower middle class, you may have the uneasy feeling you are being taken for a ride.

6. Premiums are going up. How much depends on where you live and your plan, silver, good, platinum. For silver plans, the most popular, the increase averages 7.5%, but is spikes in certain states 34% in Maryland, 36% in Tennessee. 52% in New Mexico. That’s the bad news. The good news is that only 14% of enrolled in healthcare.gov are paying their own premiums without government assistance.

PART 2 – What We Don’t Know.

1. Can insurers make money in exchanges without corporate welfare. Probably not. Insurers lost $2.9 billion in 2014. Despite $10 billion in federal bailout “reinsurance,” insurers lost $2.5 billion in individual markets in 2014, $162 for each person insured.

2. Will more states expand Medicaid? So far 20 states have resisted Medicaid expansion. No one knows how many jump on Medicaid bandwagon. Most of unexpanded have Republican governors.

3. Will exchange enrollment continues to underperform? HHS projects 10 million will enroll in exchanges in 2016, far below original estimates of 24.8 million by HHS, 23.1 million by Urban Institute, and 27 million by RAND. What’s gone wrong? Distrust of government, and fact that most uninsured are young and healthy and don’t want expensive coverage.

4. How will ObamaCare affect 2016 elections? No one knows, of course, but ObamaCare changes are coming. ObamaCare is good for most of the poor, and bad for many in the middle class. Insurers are losing money, nearly half of insurance co-ops have gone under.

Whether 2016 will be the year ObamaCare holds its ground or implodes politically depends on the electorate.

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