How to Escape Obamacare
“You get what you pay for,” the adage goes. Not with the Affordable Care Act. When open enrollment starts Nov. 1, the public will see they’re going to be paying lots more for health insurance in 2017 and getting less. Across the country, state insurance departments are announcing double digit premium hikes, often as high as 20 percent and occasionally even 40 percent.
People who earn too much to qualify for a subsidy will be forced to pay as much as a fifth of their income for health insurance. And they’ll get less choice of doctors and hospitals and less prescription drug coverage.
Annual enrollment begins eight days before voters go to the polls. Donald Trump is vowing to repeal Obamacare. Hillary Clinton is doubling down on keeping and expanding it. Democrats are worried Obamacare sticker shock will have an 11th hour impact on the election.
They should worry. Affordability was a phony claim from day one. The law requires everyone without coverage to buy the insurance industry’s product or get clobbered with a big penalty. Most consumers get taxpayer-funded subsidies and see only a fraction of the true cost. And insurers get year-end lump sum payments from the government to encourage them to under-price their plans. But only through this year. In 2017, after Obama leaves office, that corporate welfare ends — a major reason why premiums will be skyrocketing.
It’s an expensive and deceptive scheme — with taxpayers footing the bill — to make the plans look “affordable,” as the law’s title falsely claims.
The public wasn’t fooled. Twenty-two million were predicted to enroll by 2016, but only half that number did.
Young healthy people decided that the Washington-knows-best benefit package, packed with features they didn’t need, was a rip-off. Who wants to pay for pediatric dental coverage or routine colonoscopies when you’re 30 and single? Mostly older, sicker people tended to sign up, causing insurers to incur big losses — some $3 billion a year.
Democrats are telling the public not to worry about soaring premiums, because they’ll still be getting their subsidies and won’t feel the pain. That’s true for 80 percent of Obamacare customers. But beleaguered taxpayers will feel the pain. They’re paying for the subsidies, which are already costing 50 percent more per person than predicted when the law was passed. And the Congressional Budget Office predicts the cost will double again by 2025.
Also feeling the pain, big time, are Obamacare customers who earn too much to qualify for a subsidy. Individuals earning more than $47,500 and couples more than $64,080 will be whacked with the full premium hike. Already, they’re forced to pay as much as 18 percent of after-tax income and it’s about to get worse. A big difference from Obama’s promise they’d be saving $2,500 a year.
Is there an escape? In many states, yes. Millions of people are opting to pay the Obamacare penalty (2.5 percent of adjusted gross income) and then buy bargain insurance. These plans are temporary, not necessarily renewable, and limit what you can collect if you’re sick. But they’re cheap.
The administration tried to ban them but lost in federal court in July. Now they’re trying another regulation to prevent consumers from buying low-cost insurance.
Meanwhile, some Obamacare advocates are calling for draconian increases in the penalty for not signing up “to compel more people to meet their responsibility.” Ouch.
Hillary Clinton isn’t commenting on penalties, but when she first proposed universal healthcare in 1993, she told Congress she’d consider automatically enrolling those who failed to sign up and garnishing their wages if they didn’t pay. Yikes.
There is a way out. If you don’t want Obamacare rammed down your throat, vote Republican in November.
Betsy McCaughey is chairman of the Committee to Reduce Infection Deaths and a senior fellow at the London Center for Policy Research and author of “Government by Choice: Inventing the United States Constitution.”