Policy Feature Issue: State of the Union – America Can’t Afford Another Year of Obamacare

As the President attempts to restore his credibility, Americans cannot forget the past year of broken promises, website failures, fewer doctors, and higher premiums – particularly for our nation’s youth. America can expect more of the same in 2014.

Website Failures

The cancellations came on top of the Administration’s refusal to heed the warning signs of a vulnerable website. In fact, both GAO and the Department of Health and Human Services Inspector General identified security vulnerabilities associated with HealthCare.gov well before October 1, 2013.  On June 19, 2013, GAO released two reports examining the SHOP and federal exchanges. GAO cited the exchange “implementation delays and missed deadlines” and the “potential for implementation challenges moving forward.” In particular, GAO cited concerns with the implementation of the online systems and data hub that will compile and verify personal information and that have yet to be completed – let alone tested.  On August 2, 2013, the Inspector General of the Department of Health and Human Services reported “several critical tasks remain to be completed in a short period of time, such as the final independent testing of the Hub’s security controls, remediating security vulnerabilities identified during testing, and obtaining the security authorization decision for the Hub before opening the exchanges.”[1]

Broken Promises

The President over the last three years that Americans could keep their health care plan if they liked it, the Administration knew in 2010 that tens of millions of Americans in the private market could lose their current health care plan.[2] In fact, knowing of the need to drive individuals into the exchanges to make them financially feasible, the Administration specifically narrowed the interpretation of a grandfathered plan and acknowledged “that half of all employer health plans would lose grandfathered status by 2013 and the proportion of individual health plans losing grandfathered status would exceed the 40 to 67 percent range in a given year.”[3]

Fewer Doctors

Since 2009, the President has promised Americans that they can keep their existing doctor. Yet, insurers participating in the exchanges are limiting the number of doctors and hospitals covered under their insurance plans.  Low reimbursements are also forcing doctors to reject insurers’ contracts. As a result, more and more doctors are either not included or are refusing to participate in the network of providers included on an exchange. For example, according to a recent survey conducted by the Washington Examiner, seven out of ten doctors in California are not included in the California exchange.[4] In Virginia, it is “estimated that participating doctor networks …are shrinking by 70 percent in the exchange plans.”[5] And, for the millions of Americans who have received cancellation notices, they will not only have to find new plans but new doctors as well.

Higher Premiums

The President promised that premiums would go down.  Yet, Obamacare will disproportionately increase premiums for young adults.  Due to age-rating restrictions, some reports estimate that premiums for young males with single coverage could increase by 180 percent if they are ineligible for premium assistance.[6]  When new requirements on age ratings and required benefits are taken into account, new entrants in the individual market could see a premium increase of as much as 413 percent, and an average 96 percent nationally.  80 percent of young people living above the poverty line will see an increase in their healthcare costs.[7]

What’s next? More Cancellations and Higher Deductibles to Start

Americans are already seeing more employers drop health care coverage. Just last week, Target announced it was dropping coverage for its part-time workers, choosing instead to put them in the exchanges. Target joins Trader Joes, Home Depot, and other larger employers in dropping health care coverage for their part time employees.[8]

Moreover, Americans are feeling the impact of Obamacare not only in the form of higher premiums but higher deductibles.  According to a report by HealthPocket Inc., the “average individual deductible for what is … a bronze plan on the [federal] exchange … is $5,081, 42 percent higher than the average deductible of $3,589 for an individually purchased plan in 2013.”[9]  “For a couple, deductibles may be as high as $12,700.”[10]  Cancelled health care coverage, higher health care costs, and fewer doctors are the last thing Americans need in fragile economy.  The President promised on multiple occasions that the only individuals who would be impacted by Obamacare were those who were uninsured. Now, the President has upended a system with which most Americans were content.  America can’t take another year of Obamcare.

[3] See id.

[4] See Washington Examiner, Survey finds doctors rebelling against Obamacare, famous Hospitals declining to join, November 27, 2013.

[5] See id.