Big media outlets, including The New York Times and The Washington Post, last week called out former President Donald Trump for slamming Obamacare, opining that such a move was a big mistake.
Not so fast.
The truth is that Obamacare, formally known as the Affordable Care Act, failed to deliver on its high-profile promises, especially to control health care costs. In fact, insurance premiums continue to rise and Americans’ personal choices of coverage options are considerably fewer than before Congress enacted the national health care law.
The facts are stark: In 2013, the year before Obamacare took effect, the national average monthly premium paid in the individual insurance market was $244.
In 2023, the average benchmark premium for plans in the Obamacare insurance exchange was $464 per month. For 2024, average monthly premiums are expected to reach $483.
In other words, the results are exactly the opposite of what President Barack Obama promised in 2009 and 2010.
As for personal choice and competition, the Obamacare insurance exchanges are still 24% less competitive than the individual market before the Affordable Care Act was enacted.
In 2013, before Obamacare took effect, almost 400 plans offered insurance coverage in the individual market. By 2023, there were only 300 plans.
While premiums climb and choices narrow, the number of Americans dependent on government health care continues to grow. Enrollment in Medicaid (the welfare program for the poor) grew from 36 million in 2013 to 90 million in 2023. And 14 million Americans now depend on government subsidies to offset high premium costs for coverage purchased through the government exchanges.
My colleague Edmund Haislmaier, a senior fellow in health policy at The Heritage Foundation, dug deeper into the details. (The Daily Signal is Heritage’s news outlet.)
Haislmaier found that from 2014 through 2021, enrollment in individual coverage (mainly subsidized through the exchanges) was about 30% higher than before Obamacare. He found that average Medicaid enrollment was about 20% higher, while average enrollment in employment-based group coverage was about 2% lower.
Worse, the Biden administration’s response is to paper over rising health care costs with more government spending from the pockets of hardworking Americans. That’s not the solution, it’s the problem.
Consider, for example, the inappropriately named Inflation Reduction Act. The new law extended what was supposed to be a temporary COVID-19-related emergency action to make existing health insurance subsidies more generous. The law not only made the subsidies more generous for those who already were eligible; it also lifted the income limit so that almost everyone, regardless of income, is eligible for a government subsidy. While set to expire in 2025, it’s clear the intent is to make them permanent.
Meanwhile, the Biden administration continues to push states to expand their swollen Medicaid programs and urges states not to be too aggressive in checking to see who is still eligible for the program, post-COVID-19.
The status quo isn’t sustainable. Americans need change.
Conventional wisdom says that after the Senate’s miserable failure to replace Obamacare in 2017, any serious congressional effort at health reform ended. The conventional wisdom, as usual, is wrong. Important work is already underway.
House Republicans already are moving legislation to incorporate important policies that pick up where the last administration left off. More can be done to expand patient control over health care dollars and decisions, to offer more coverage choices and options, and to give states much needed flexibility to better design their health care markets.
Congress has taken some important steps. For example, House committees advanced major initiatives to make prices transparent and to change health savings accounts to expand patient control. To complement these worthwhile measures, Congress also should make it possible for patients to benefit from making cost-conscience decisions.
Today, an insurance plan (and by association, employers and the government) can reap the savings of a patient who chooses a lower cost service option. The limitations that prevent a patient from personally sharing in these savings should be removed.
Policymakers also should take steps to expand the number of affordable coverage options available to individuals and families. Employers should be able to band together to form associations and expand those health coverage options to other groups outside employment arrangements.
And those who need temporary, gap coverage should have the option to purchase limited-duration health insurance. Employer options should be expanded to move from a defined-benefit model to a defined-contribution model to deliver health care benefits.
Just as with measures to give parents alternatives to failing public schools, individuals enrolled in the Medicaid program should have the choice to enroll in a private health plan of their choice.
Finally, Congress should give states more flexibility in meeting the health care needs of their citizens. States shouldn’t be locked into Washington’s one-size-fits-all straitjacket. States should be able to innovate and experiment with the best ways to deliver health care that expands coverage, increases competition, and lowers costs.
The Biden administration, however, is frustrating change and innovation.
Americans have waited far too long for patient-centered health care. The right policies to accomplish this goal are ready and available.
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