'Sabotage:' Following GOP 'Remodel,' Average Baseline Obamacare Premiums Set to...Drop

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Posted: Oct 25, 2018 2:05 PM
'Sabotage:' Following GOP 'Remodel,' Average Baseline Obamacare Premiums Set to...Drop

The top two issues on voters' minds this year, according to virtually all public polling, are healthcare and the economy.  Republicans hold a sizable lead on the latter front, while Democrats enjoy a similarly large edge on the former.  It may be galling for many conservatives to see Congressional liberals regain a clear edge on healthcare policy just half-a-decade removed from the implementation of their dishonestly-sold Obamacare scheme, which did the opposite of making health care more "affordable."  But Republicans ran -- quite successfully -- on "repeal and replace" for years, then failed to follow through on that promise with a viable alternative once they gained power (yes, misinformation and fear tactics made their job much harder), frustrating their own supporters and alienating wary independent voters.  

Even as more Americans have been harmed by Obamacare than helped, people are very wary about uprooting the status quo for an uncertain future.  That's why the so-called 'Affordable' Care Act was consistently unpopular...up until the moment when there was a realistic chance that it could be upended.  And it's why the Left's new healthcare project, the imposition of a shockingly unaffordable and massively disruptive single-payer nationwide system, will undoubtedly be met with fierce opposition.  Last week, we quoted Peter Suderman's piece at Reason noting that in spite of angry Democratic charges of GOP "sabotage," Republicans' changes to Obamacare have not sunk the program.  He argues that in some important ways, the 'remodel' has stabilized matters, a thesis that somewhat vindicates this insight from the summer of 2017:


Here's the crux of Suderman's updated analysis, in case you missed it:

Obamacare has become more popular under Trump, but the rise in popularity has occurred as Republicans have made a series of changes to the program that Democrats charged amounted to a policy of coordinated sabotage—cutting promotional funding, allowing for cheaper insurance subject to fewer regulations, ending a line of insurance subsidies a court had ruled illegal, and zeroing out the individual mandate penalty. Yet the charge of "sabotage" has become harder to sustain as the results of GOP changes have become clear. Under Trump, enrollment in Obamacare's insurance exchanges has fallen only slightly, the overall uninsured rate has stayed basically the same, and after years of steady hikes, health care premiums have leveled off or even fallen in some states, while insurers who fled the exchanges are returning...What the polling suggests, then, is that the public prefers the version of Obamacare we have now, with stable rates and insurer participation, along with access to a wider variety of plans. The popular version of Obamacare is the one remodeled, but not repealed, by Republicans.

Suderman allows that the future of the program remains unclear and that the facts on the ground could yet shift, but it does appear as though "remodeled" Obamacare (the sale new, cheaper, short term plans have been permitted, and the coercive individual mandate has been eliminated) is a relative hit.  Longtime 'Affordable' Care Act foe Phil Kerpen looks at additional numbers that reinforce this trend:


From the federal government's October report:

The Centers for Medicare and Medicaid services released data showing average premiums rates will drop in 2019 for individual health insurance plans sold on the HealthCare.gov platform. Specifically, the average premium for the Second Lowest Cost Silver Plan (SLCSP) is expected to drop by 1.5 percent. In addition, more health insurers are entering the market in 2019, providing more plan choices for consumers. These developments suggest health insurance markets across much of the country are stabilizing after a number of difficult years. Individual health insurance markets across the country have experienced substantial disruption in the years following the implementation of the Patient Protection and Affordable Care Act (PPACA). Average premiums more than doubled between 2013 and 2017 and increased another 27 percent in 2018. In addition, many issuers dropped out of the market in recent years, leaving more than half of U.S. counties with only one issuer in plan year 2018. Rising premiums and fewer choices resulted in a large portion of unsubsidized people dropping out of the market...

CMS took immediate administrative actions in 2017 to address market stability issues and to improve the performance of the Exchange in order to mitigate the deterioration of the individual health insurance market. These actions focused on improving the individual market risk pool by encouraging people to maintain continuous coverage and attracting younger and healthier people to join the market. After implementing these administrative actions, market conditions moving into plan year 2019 substantially improved...Alongside stabilizing premiums, issuer participation is also growing and expanding across the country, making health insurance markets more competitive and driven to deliver better value to consumers.

Longtime Obamacare supporters are arguing that these improvements are arriving despite actions from the Trump administration and the Republican Congress, and that the upcoming reductions are the result of market over-corrections melting away.  But it's indisputable that some of the less expensive plans green-lit under the new structure have proven attractive to many consumers, and that some of the acts of supposed "sabotage" have not exploded the system.  This is how HHS Secretary Alex Azar described the reasons behind the program's healthier trajectory late last month:

Within a month of the President’s inauguration, HHS proposed a national “market stabilization” rule. That was actually its title. Literally, one of the first significant actions by the President elected to repeal and replace Obamacare was stepping in to help the American people by stabilizing the market as best he could, within the law’s broken confines. Following the recommendations of private-sector experts, we cut down on ways people could game the system and drive up premiums for everyone else. We broadened the array of plans allowed and we gave states flexibility to repair their insurance markets. We took bold action to fix a lawless situation in which the previous administration made payments to insurers that Congress never funded...When a court struck down an Obama administration regulation regarding another type of payment to insurers, it was President Trump who issued an emergency regulation to fill the void. Finally, President Trump has approved a number of state reinsurance plans, an efficient solution that helps states pay for the sickest patients, allowing insurers to keep premiums lower. It turns out, when you have a president who’s willing to take decisive action, who understands business, who’s willing to work with the private sector, you can find a way to help American patients, even within a failed system like the ACA.

I still believe the overall structure of Obamacare should be replaced from top to bottom, but last year's painful legislative fight proved that the GOP didn't have the votes, even with majorities in both houses of Congress. Whatever happens in less than two weeks, the likelihood that the GOP will gain net votes in Congress is almost nil, so tinkering with the Obamacare framework appears to be the only option.  That's reality, as is the fact that many conservatives are already digging in for an eventual battle over single-payer.  And despite taking steps that liberals swore would ruin the entire system (which Congressional Democrats fiercely opposed, and have sought to undo), there has been some positive movement on both the affordability and 'choice and competition' fronts. 

Even if the big picture remains deeply imperfect, we're in a better place than we were under the Obama administration, when average premiums on individual plans sold through Healthcare.gov more than doubled between 2013 and 2017. I'll leave you with Philip Klein's piece about the coverage of pre-existing conditions (a subject that attracted a great deal of dishonesty and hysteria during the failed 'repeal and replace' push):