Many Democrats seem to get sick in the fall during election years from a chronic disease known as premium increase-itis. That’s when Affordable Care Act (i.e., ObamaCare) premiums are announced for the next year. And it appears that 2022 will see one of the worst outbreaks in years.
As The Hill’s Peter Sullivan explains: “The American Rescue Plan signed by President Biden last year temporarily increased financial assistance under ObamaCare, but that increase is set to expire at the end of this year, causing an increase in [2023] premiums for enrollees in the health law unless Congress acts.
“Notices about the premium increases would be sent out shortly before the midterm elections, adding political pain for Democrats in addition to the higher premiums for consumers.”
So, on top of all the inflation pain consumers are already experiencing with food, rent, medicine and especially gasoline, several million Americans will receive a notice that their ObamaCare premiums are going up significantly. And while taxpayers will still be subsidizing those premiums, the subsidies won’t be as generous as they have been.
The Kaiser Family Foundation estimates that without additional American Rescue Plan subsidies, the 14.5 million people in the ACA Marketplace – 13 million of whom receive taxpayer-supplied subsidies – will see an average 53 percent increase in their 2023 premiums. Ouch!
That’s almost exactly the same increase (55 percent) in the price of a gallon of gas from 12 months ago. And you know how consumers are responding to that increase.
Let’s just say Democrats had different expectations when they passed, with no Republican support, the Affordable Care Act in 2010. They believed – or at least said they believed – President Obama’s promise that premiums would go down once the federal government was managing health coverage. Democrats thought voters would see how affordable their ObamaCare premiums would be right before going to the polls in election years, and would show their appreciation by voting for Democrats.
That dream ended about nine months after Democrats passed the law. The November 2010 elections saw a record number of Republicans defeating incumbent House Democrats.
In fact, so many Democrats are worried about voter pushback that 26 of them have sent a letter to House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.) “strongly urging” them to reinstate the allegedly “temporary” enhanced ObamaCare premium subsidies. “Our constituents elected us to lower their health care costs — and through the American Rescue Plan Act, we did just that,” they write.
But let’s be clear about one thing: ObamaCare has never lowered health care costs. Health insurance premiums began rising immediately when ObamaCare coverage went into effect in 2014.
What Democrats did was use taxpayer money to subsidize ObamaCare premiums, thereby masking the actual cost of coverage. And then they used the American Rescue Plan to double down on that masking. Now they fear consumer sticker shock and backlash when part of that masking is removed.
Yes, average ObamaCare premiums generally stabilized over the past three or four years. That stabilization was the result of several factors, but two are important. Health insurers made significant adjustments to their coverage over the years to minimize premium increases. For example, shifting to so-called “skinny” or “narrow networks” where very few health care providers participate because the reimbursement rates are so low. And insurers jacked up deductibles to between $6,000 and $7,000 per individual in ObamaCare’s bronze plans — and often double that for a family.
With deductibles that high, lower-income people tend to put off getting care because they don’t have out-of-pocket money to spend. Health actuaries have always known that high deductible plans reduce health care utilization. And outrageously high deductibles, like those in ObamaCare’s bronze plans, effectively discourage getting care among working families.
Now those very people are likely to see their premiums rise by 50 percent.
The Democrats who signed the letter are urging their leaders to extend the enhanced ObamaCare subsidies by tacking on a provision to a budget reconciliation bill, which can bypass a Senate filibuster and so needs only 50 Senate votes, plus the vice president to break the tie. In other words, no Republican support once again.
But even if that ploy is successful, it doesn’t solve the problem. It doesn’t cure the disease. Like aspirin, it only masks the pain for a little longer.
Premium increase-itis may be making Democrats sick now. But what they really fear is that it will spread to voters — right before the November midterm elections.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow him on Twitter @MerrillMatthews.