Old and busted: Americans can’t wait for the cost-saving goodness of our ObamaCare exchanges! New hotness: Don’t expect a rush to the websites for … a while. White House communications adviser told Third Way yesterday that “October will be light for enrollment”:
Enrollment will go through lots of ebbs and flows over the six-month enrollment period rather than remaining steady, communications adviser David Simas told reporters during a 45-minute interview at an event sponsored by Third Way at which he downplayed the Obama administration’s expectations for the law’s rollout starting next week.
“October will be light for enrollment … November will be a little bit better,” Simas said. “December will be better than the previous month … probably a dropoff in January from December, the same thing in February with another increase in March right before enrollment ends.”
“There will be ebbs and flows throughout it,” he added. “We are looking at Oct. 1 not as the beginning of the six-day or six-week push. This is six months of raising awareness.”
Ahem. The law has been on the books for exactly 3.5 years now, and has been one of the most hotly-contested issues during that time. Why has it taken this long for the White House and HHS to “raise awareness” of the one mandate they refuse to delay?
“In a perfect world with a ton of money for outreach and engagement, perhaps you could have started earlier,” Simas said. “This is not a perfect world, and there are limitations on what you can do.”
Some proponents of the law have questioned whether the administration started public outreach early enough, concerned that fewer Americans than hoped will enroll in coverage next year.
Perhaps it’s not just a problem of too many people not realizing that the exchanges exist and the mandate won’t be postponed — unlike, say, the employer coverage mandate or the out-of-pocket expenses cap mandate on insurers. Perhaps it’s too many people realizing that ObamaCare is blowing up the costs of premiums, even beyond that covered by subsidies. HHS tried to claim that exchange premiums are “lower than projected,” which Forbes’ Avik Roy called “happy talk”:
“Premiums nationwide will also be around 16 percent lower than originally expected,” HHS cheerfully announces in its press release. But that’s a ruse. HHS compared what the Congressional Budget Office projected rates might look like—in 2016—to its own findings. Neither of those numbers tells you the stat that really matters: how much rates will go up next year, under Obamacare, relative to this year, prior to the law taking effect. …
Based on a Manhattan Institute analysis of the HHS numbers, Obamacare will increase underlying insurance rates for younger men by an average of 97 to 99 percent, and for younger women by an average of 55 to 62 percent. Worst off is North Carolina, which will see individual-market rates triple for women, andquadruple for men.
In my column today for The Fiscal Times, I point out that if retailers tried advertising on this basis, the FTC would sue them for bait-and-switch tactics. As it stands, the HHS language is simply Orwellian:
What actually does happen to premium costs next week? Bloomberg reported after the release that the average individual policy will cost $2,988 a year through its exchanges. That is 37 percent higher than the average individual health-insurance plan in 2011 ($2,196), the first year in which coverage mandates began to take effect under Obamacare. That’s hardly a downward bend in the cost curve, no matter what kind of apples-to-oranges comparison HHS uses to distract from that steep price hike. …
Advocates of Obamacare argue that the price of premium hikes don’t really matter because individuals buying plans in the exchanges will be eligible for subsidies. However, that’s only true for some of those consumers, and that ignores three very salient points.
First, rising premiums demonstrate that the ACA hasn’t actually reformed anything, and second, the subsidies don’t come out of thin air. As premiums skyrocket, more money will be needed from taxpayers to fund those subsidies – taxpayers who are now having to spend a lot more on their own health insurance. Last, as premiums skyrocket, employers will increasingly opt to pay fines and push their employees into ACA exchanges, which will create the need to fund even more subsidies.
Roy also discovers through his joint analysis with the Manhattan Institute that even most of those receiving subsidies will pay more for health insurance overall, and that becomes more evident as the consumer ages.
“In the 13 states plus D.C.,” Roy writes, “a 27-year-old would have to make 59 percent of the median income of his peers, or less, to come out ahead with regard to Obamacare’s subsidies. A 40-year-old would have to make less than 57 percent of the median income for his peers.” Older people do much better. “The average 64-year-old who makes less than 111 percent of the median income for 64-year-olds will spend less on premiums than he did before. … [The] overall results make clear that most people will not receive enough in subsidies to counteract the degree to which Obamacare drives premiums upward.”
The Washington Examiner calls the HHS release “ObamaCare premium fables“:
The more likely outcome is millions of similarly situated young consumers will opt to have no coverage because the premium increases in other cities across the country will be comparable or, in many cases, much steeper. In Miami, the same 27-year-old now paying $66 per month will pay $163, a 147 percent increase. The figures for other major cities include Chicago (69 percent), Atlanta (286 percent), New Orleans (336 percent), Houston (119 percent), Philadelphia (167 percent) and Omaha (523 percent).
And don’t forget that to keep down costs while meeting Obamacare’s regulatory requirements, many insurance companies have opted to strip down the provider networks of the policies they are offering on the exchanges, meaning fewer choices of doctors and hospitals.
When those millions of young people opt out, rates will have to be increased for everyone else. This is because, as the Washington Examiner‘s Philip Klein has conclusively demonstrated, Obamacare absolutely depends for its success upon the infusion of revenue from healthy young policyholders to subsidize coverage for older people who will cost far more to insure.
Spinning fables about the cost of Obamacare premiums apparently is the irresistible temptation for the Obama administration because, as the Manhattan Institute’s Avik Roy points out, the official announcement from HHS of the 36-state premium rates included the claim that “premiums nationwide will also be around 16 percent lower than originally expected.” That statement is an artful misrepresentation created by comparing the new rates to Congressional Budget Office projections of what rates might be in 2016.
George Orwell is spinning in his grave. Small wonder that the White House now wants to lower expectations (and blame Republicans for trying to prevent this disaster from taking place at all). By the way, whatever happened to the promise to lower premiums by $2500 a year? Good times, good times.