The people who were supposed to benefit most from the Affordable Care Act were those who could least afford health insurance. Two years into Obamacare’s implementation, however, that same segment of the population is being hit hardest by the ridiculously high insurance premiums and deductibles that have resulted from the law’s costly mandates.
According to an analysis by the Robert Wood Johnson Foundation and the Urban Institute, one in 10 Obamacare enrollees whose earnings fall between two and five times the federal poverty level have coverage costs that exceed 21 percent of their incomes. That’s more than what a household is supposed to spend on housing. The median Obamacare exchange customer in that range spends more than 10 percent of income on premiums and out-of-pocket expenses.
Despite a modest rise in signups during the current open enrollment period, Obamacare is still very much on shaky ground. In addition to the financial hardship that the coverage places on low-income enrollees, Obamacare’s high premiums and high deductibles are causing exchange-based insurance to be seen as a bad deal by even those with higher incomes. A mere 35 percent of the 24 million Americans eligible for Obamacare subsidies are actively enrolling and paying their premiums, and huge losses from the sale of Obamacare plans have forced UnitedHealth and other insurance companies to seriously consider pulling out of the exchanges. The more insurers bail out of the exchanges, the greater the risk to insurers who remain in the exchanges, and the greater the chance they’ll exit, as well.
Politics are also doing a number on the legislation. Five years ago, Democrats justified Obamacare’s 40 percent “Cadillac tax,” claiming it would hit only the benefits of the wealthiest Americans. However, a group of Democrats joined Republicans to delay the tax because they realized it would punish middle-class Americans who live in regions that have a high cost of living, such as the Northeast and West Coast, as well as union health plans.
The Affordable Care Act cost Democrats dearly at the polls in 2014, and they are very much aware that, if unchecked, Obamacare could again swing the election to Republicans in 2016. Democrats need the support of organized labor next year, and by delaying the Cadillac tax until 2020, they are more likely to get it.
While politically expedient, the Cadillac tax delay won’t allow the government to recover its Obamacare costs and will accellerate the law’s implosion.
Giving unions relief from Obamacare is not enough. All Americans need to be saved from this broken legislation. There is no fixing the Affordable Care Act. The country’s next president must champion its repeal.