I've written about this issue a few times now, but the Left's spin about Democrats' terrible, deteriorating healthcare law -- which Republicans have failed to replace, in spite of endless promises -- is misleading and not credible. As the story now goes, the reason why Obamacare premiums are soaring by double digits across most of the nation is that Trump-caused "uncertainty" is spooking the market. Let's be clear: There is some truth to that analysis, which some insurers have cited as a factor behind their rate hikes. And because the Trump administration keeps pushing off its decision on whether to continue President Obama's unlawful cost-sharing "stability" payments, carriers are operating in the dark, in terms of anticipating whether a major source of taxpayer funding might suddenly get yanked away. In order to hedge against this possible outcome, insurers say, they're exiting markets (in which they've already been racking up major losses) and raising their prices.
As a related aside, I've argued that Trump should cancel Obama's illegal, never-approved bailouts to the industry, and that Congress should then proceed to appropriate those dollars as part of an Obamacare reform compromise. Trump should also cancel the absurd scheme under which members and staffers who earn too much to be eligible for subsidies are supposedly allowed to side-step the law's prohibitive costs. In any case, even if the sources of cost-sharing instability were clarified and dealt with definitively, Obamacare's unsustainable rate and access shock would still be marching forward. This isn't partisan conjecture; it's based on facts already in evidence prior to Trump taking office. Investors Business Daily has a strong editorial busting an emerging myth:
The seeds of today's double-digit premium increases and collapsing competition were planted long before Trump took the oath of office. In fact, they were embedded right there in the law President Obama signed in 2010. Take a look at the ObamaCare-created nonprofit insurance co-ops. Democrats put this feature in the bill, and pumped $2.4 billion dollars into their creation, as a means to hold premiums down. Long before Trump arrived on the scene, however, most of the 23 co-ops had gone bankrupt, taking their taxpayer "loans" with them. Earlier this year, Minuteman Health, which sold plans in Massachusetts and New Hampshire, became the 19th co-op to go belly-up. Just four co-ops remain. The massive failure of ObamaCare's grand co-op experiment has forced hundreds of thousands of people to find other insurance plans.
Last week, Anthem announced that it was pulling out of Virginia, after it had already decided to abandon Wisconsin, Indiana and Ohio. Trump's fault? Hardly. In early 2016, Anthem said it had "serious reservations" about the future of ObamaCare's markets and that it could pull out of them. When Aetna announced in May that it was getting out of the ObamaCare business entirely, it made its reason abundantly clear "Our individual commercial products lost nearly $700 million between 2014 and 2016, and are projected to lose more than $200 million in 2017 despite a significant reduction in membership." Aetna said these losses were the result of structural problems with the exchanges — not "uncertainty" caused by Republicans — which " led to co-op failures and carrier exits, and subsequent risk pool deterioration."
The piece goes on to make this crucial point:
Meanwhile, at the behest of the Health and Human Services Department, McKinsey & Co looked at what was driving ObamaCare's huge premium increases from 2013 — the year before ObamaCare went into effect — through 2017. Note that insurers set their 2017 premiums before the November elections, and so had no reason to expect any "uncertainty" caused by Trump or Republicans. What did McKinsey find? That ObamaCare's onerous market regulations — called "guaranteed issue" and "community rating" — were responsible for the bulk of ObamaCare's skyrocketing premiums. In Tennessee, for example, these regulations accounted for almost three-quarters of the fourfold premium increase after ObamaCare went into effect.
Fred Barnes has more on the McKinsey study, which underscores why the law is structurally unsound. It requires all insurers to offer coverage to anyone who wants to buy it, including people with costly pre-existing conditions. Under those regulations, that expensive group cannot be charged significantly more than healthier people for the same plans. Due to this confluence of dynamics (including an array of "essential" health benefits that every compliant plan must cover), insurers were hoping that Obamacare's individual mandate would force throngs of "young invincibles" into the marketplace to offset the considerable added costs of covering older, sicker people. That has not happened, and the slow motion death spiral has been churning ever since reality that started to become clear. As the IBD editorial notes, even when Obama's unconstitutional payouts were reliably flowing, and Hillary Clinton's election appeared assured, big jolts were announced by the Obama administration. Individual market premiums on Obamacare's federal exchange have more than doubled, on average, between 2013 and 2017. That was all baked in on Obama's watch, not Trump's. There are various aggravating factors at play along the periphery of the law, but the primary driver of Obamacare's ongoing dysfunction is Obamacare itself. I'll leave you with this, which touches on one of the law's smaller broken promises -- certainly as compared to the central "affordable" lie:
This headline a close cousin of various stories explaining the development of Obamacare actually increasing ER visits, despite supporters' assurances to the contrary.