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Does Obamacare Measure Up? Early Data From Health Exchange Says No!

ObamacareNow that the enrollment period for the Affordable Care Act (Obamacare) has been open for multiple weeks, you might be curious about how it is working out thus far. I am sure you have heard about the problems with the federal marketplace’s website and how difficult it has been for health consumers to log on to the health exchange. Because of these issues and how hard it is to go through the quote process, it remains nearly impossible for people to know what their rates are going to be.

However, the early data regarding insurance premiums that has been released shows that rates have increased by as much as 300 percent. This is a considerably different number than what the Department of Health and Human Services has been telling Americans for the last many months. In fact, their prediction was that rates for insurance may actually be lower than people expected.

Why the Discrepancy?

It is true that the insurance premiums in some states are coming in lower than projected. However, the majority of states are finding that their premium increase has at least doubled, if not more. The reason the two numbers are so different depends simply on whose data you are relying upon.

The Department of Health and Human Services is choosing to release data from only a few exchanges—those that are reporting lower rates. They are thus skewing the data to make it appear that the Affordable Care Act is, in fact, affordable for the American public. The media spin is that even if the rates are not as low as expected, premium subsidies and tax credits will make them lower in the long run.

However, a study of the rates released was done by the Manhattan Institute to see how the health exchanges are truly measuring up. Their data is much more comprehensive, encompassing all of the data released rather than just that from the states that do have lower rates.

What Is the Reality?

The reality for health consumers is that insurance premiums under the Affordable Care Act are, for the most part, much higher than the Department of Health and Human Services has led you to believe.

When making the comparison, pre-ACA rates were compared to post-ACA rates. Even after you factor in that these policies are guaranteed-issued policies (meaning that insurance companies cannot deny you coverage for a pre-existing condition) and that there are mandatory preventive care coverages that were not in place prior to the ACA, the premium amounts have skyrocketed.

Granted, not all of the data from all of the states participating in the federal marketplace have released their data. This allows the HHS to choose carefully which data they want to release.

However, when the Manhattan Institute compiled all of the available data, their findings were vastly different. For the typical male health consumer in his forties, the premium increase was a whopping 99 percent on average. For women in the same age group, the percentage was lower at 56 percent, which is still considerably higher than HHS is claiming.

Won’t Tax Credits and Subsidies Defray Some of the Cost?

One of the high points of the Affordable Care Act, the one that the Department of Health and Human Services has focused the most on, is the premium subsidy or tax credit available to those whose income is less than 400 percent of the federal poverty level. HHS claims that these subsidies and/or tax credits will make up for any rise in premiums.

While it is true that there are subsidies available if you qualify, it is not true that the amount of subsidy you get will offset the cost of the premium. For many health consumers, the amount of credit they will get for purchasing insurance will in no way make up for the amount of premium they have to pay.

Additionally, a tax credit at the end of the year does not help families make their monthly premium payments.

Since the majority of people who are currently uninsured are in the healthy and under-40 age bracket, their premiums are going to be used to subsidize the care of the elderly or people with long-term illnesses. For these healthier people, the Affordable Care Act is actually likely to hurt them financially.

What Else Is HHS Not Telling Us?

While the Department of Health and Human Services is cheerfully talking about how the cost of health care is actually going to decrease for taxpayers due to the success of the Affordable Care Act, this is not the entire story. They are only referring to the people who are actually eligible to shop for insurance on the health exchange.

One of the things that they do not like to talk about is how more people are going to qualify for Medicaid (in states where the Medicaid program was expanded to provide coverage for more people), which makes them ineligible to participate in the health exchange.

Medicaid is federally funded medical insurance for low-income individuals, and these funds come out of the taxpayers’ pockets. So, it appears that we are still going to be paying for the health care of others, regardless of whether they are insured or not.

In addition, people who are covered under a group health plan through their employer are also unable to shop for insurance on the health exchange. As long as their insurance premiums through their employer do not cost more than 9.5 percent of their adjusted gross income (AGI), they will not qualify for any subsidy or tax credit. As long as coverage is offered for spouses, it does not matter how high their premiums are—they will either have to enroll in a health plan or pay the penalty for not being insured.

At this point in time, it is apparent that both the Department of Health and Human Services and the entire Obama administration are deliberately manipulating the data to make it seem as if the Affordable Care Act is performing as well or better than they projected. For those of us who have been skeptical about the way health care reform has shaped up thus far, none of this comes as a surprise.

With hope, more Americans will become aware of the true facts and realize how effectively they have been duped. I think that time will come sooner rather than later.

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