The
law was sold to Americans as a plan to save money on health insurance.
However, the way it works out is that some save, while others pay a
whole lot more. Plans on the new federal exchanges
are generally more expensive than equivalent coverage available before
the law.
A
detailed county-by-county analysis by researchers at the Manhattan
Institute found that individual market premiums have increased by an
average of 49 percent across the country from 2013
to 2014.
Right
now, health insurers are setting their rates for the next year. So far,
there is little information about the premium costs in most states for
2015. Florida is the first state to provide
information about what consumers will be paying.
According
to the Florida Office of Insurance Regulation, premiums for plans on
the Obamacare exchanges will increase by an average of 13.2 percent. The
most popular plan in the state, Florida
Blue, plans to raise their rates by 17.6 percent. Big government
subsidies will help some, but not all, consumers afford these increases.
Over
the coming months, other states will announce rate changes, including
Pennsylvania. Many families are going to be shocked to find how much
more money in their budget will be going to health
care next year.
Recently,
we got another shock when the Government Accountability Office issued
their report on the total mess that is Healthcare.gov. Everyone knows
that Healthcare.gov was a disaster at its
launch, but even though the consumer side of the website works
relatively well now, behind the scenes parts of the site still aren’t
built.
Government
information technology programs are frequently disasters. In recent
years, agencies from the IRS to Social Security to the Department of
Defense have spent billions of dollars on
computer systems that never worked properly.
Healthcare.gov
is just another disaster to add to the list. According to the GAO,
government managers were primarily at fault. Work on the website started
without essential information like
how many states would participate or how many enrollees would need to
be served. Compounding this error, the contracts for the site were
constructed in a way that the government paid regardless of whether the
system worked.
In
September 2011, Healthcare.gov was expected to cost $56 million. By
2014, the bill had ballooned to $209 million. The cost for the data hub
had increased over time from $30 million to $85
million.
Last
year, in the midst of the disaster, the government tried to blame
contractors and fired the principle company building Healthcare.gov. A
new contract with a new company was signed for
$91 million, but this has already grown since the beginning of the year
to $175 million. No telling how much it will be before work is
completed.
The
cost of final price shock is still somewhat unknown. The Affordable
Care Act contains a so-called risk corridor provision. The provision is
meant to smooth out insurers’ losses from new
health plans on the Obamacare insurance exchanges. The risk corridor
procedure typically reduces payments to plans that are doing better than
projected and increases payments to those who are doing worse.
If
this is done in a budget neutral fashion, it doesn’t hurt taxpayers.
However, under Obamacare there may a whole lot of losers and few
winners. There is great concern that the administration
will use the risk corridor provision to give almost every health
insurer increased payments—essentially bailing out the industry. Before
the end of the year, we could see what the bill to taxpayers will be.
There
are some things only the government can do, such as defending our
nation. Running health care is a tremendous task, and even the smartest
people in the Obama administration have failed.
Government isn’t the answer and Obamacare needs to go.
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