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Not Enough Subsidized Signups and Obamcare Goes Over Cliff

Healthcare marketplaces failing to attract uninsured because of high out-of-pocket costs and deductibles.

by
Rodrigo Sermeño

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May 1, 2014 - 2:44 pm
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WASHINGTON – A top healthcare analyst said the Affordable Care Act’s health insurance marketplaces will not be sustainable unless most of those eligible for subsidies sign up.

Robert Laszewski, president of Health Policy and Strategy Associates, said that as few as 30 percent of people eligible for subsidies in the ACA have signed up for coverage.

In order for the ACA to be sustainable, it has to get at least 70 percent of those people eligible for subsidies to sign up, he said.

People earning less than 400 percent of the federal poverty level – about $46,000 for a single person or $94,000 for a family of four – may be eligible for a government subsidy to help them buy coverage.

Laszewski said that Obamacare’s main problem is that the people who should be the most inclined to sign up do not like the plans.

“This is a fundamentally important question. Because why did we turn the insurance market upside down…if we’re not successful in getting the people we wanted to get in the first place?” he said Friday at a forum sponsored by the American Enterprise Institute.

He said the ACA has failed to attract uninsured individuals because they still must pay about 10 percent of their after-tax income for plans with high deductibles and narrow provider networks.

The average deductible for the ACA’s silver-tier health plans, the most popular in the exchanges, is about $2,500.

Under the ACA, health insurance companies are offering smaller provider networks to mitigate cost increases. Typically, a narrow network includes providers who agree to lower prices with the expectation that patient volume will grow.

Laszewski, who described himself as an Obamacare critic who sees the need for healthcare reform, said the ACA needs fixing, particularly in its health plan offerings.

He said the Obama administration could get the ACA on track by broadening the offerings and providing “benefits up front so that healthy people can see value.”

Laszewski expressed concern that the enrollment figures might convince “ardent supporters of Obamacare that [the law] doesn’t need fixing.”

President Obama announced on April 17 that 8 million people have signed up for health insurance under the ACA, surpassing Congressional Budget Office projections. The president blasted critics of Obamacare by saying that they were “wrong” all along about the law.

On the other hand, Republicans have said that the White House continues to conceal the full impact of Obamacare, pointing to how thousands of people had their insurance plans canceled. They also have noted that the federal health care law remains unpopular among Americans, with 54 percent of them disapproving of it.

“While the supporters of Obamacare citing 8 million are getting pretty cocky these days, I think Republicans are overly confident as well,” Laszewski said. “I actually think that the Democrats can take this issue back by November if the Republicans aren’t careful.”

He said there are two very different interpretations of the so-called 8 million enrollments.

The first is that the enrollment has dramatically exceeded expectations and proves that the program is working, but “we’ve hardly made a dent in the number of people who are uninsured.” The second interpretation is that “the program is still a regulatory nightmare and needs to be repealed and replaced.”

A February survey by consulting firm McKinsey & Co. pointed out that most of the people enrolling in the program were previously insured. Newer survey data by the RAND Corporation came up with some of the same conclusions, noting that only 27 percent of people who have selected a plan on the federal health insurance exchange did not previously have coverage.

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Top Rated Comments   
I don't get why Obama is proud of the number of signups. Regardless of how many.
He's basically saying, "I made it mandatory and threatened people and look, they obeyed, Yeah Me!"
So?
17 weeks ago
17 weeks ago Link To Comment
There's something very wrong with the concept that, unless DemBamaCare can get more people who need subsidies to sign up, it's going to be unsustainable.
I'd think that needing more people who get subsidies would make it less sustainable. And I suspect that's true.
DemBamaCare delenda est.
17 weeks ago
17 weeks ago Link To Comment
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All Comments   (30)
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Am I the only one who noticed?

This is the only anti-Obamacare article on the pjmedia front page. The article has sunk so low that the only comments it will get this weekend are from me and those nice people who talk about making money on the internet.

Another thing I couldn't help but notice is that Rodrigo is calling it the ACA much more often than Obamacare. It seems that Rod is trying to avoid the term. I can understand why. The Ghost of LBJ would love it if Medicare was called Johnsoncare instead. Republicans were hoping to hang Obama with the term Obamacare. Now they worry that a program that will be popular for years will bear the name of a man they hate.

I don't like Obamacare myself. But I didn't go all-in on my opposition like the GOP did.

Now we are at the turn and things don't look so good.

If the river doesn't save them, the Republican Party will be dogged by their opposition.
17 weeks ago
17 weeks ago Link To Comment
Mr. Writer of fiction -- what makes you think that O'Care will bomb because of no input of money? Ya hain't never heerd of the Fed Reserve and printing of money?
17 weeks ago
17 weeks ago Link To Comment
"...why did we turn the insurance market upside down…if we’re not successful in getting the people we wanted to get in the first place?”

Because the point wasn't to solve the problem of the uninsured. The point was to pave the way for nationalized health insurance.

And it's precisely attitudes such as Laszewski's (doesn't believe ACA will ever be repealed) that create the self-fulfilling prophecy. The longer Obamacare is law, the more likely we go the way of euro socialized medicine...until we run out of other people's money... or doctors.
17 weeks ago
17 weeks ago Link To Comment
The problem here is that the majority of the people eligible for subsidies previously paid nothing for their healthcare. If they were sick they headed on down to the ER and got treated. If they had more serious health problems they got treated and never paid the bill.

Now Obamacare comes along and they want them to pay for coverage, even with a subsidy and pay a copay and deductible on top of that.

No surprise that there are not that many takers.
17 weeks ago
17 weeks ago Link To Comment
All who thought it was gonna be FREE are discovering a few new things:
Wazza deducktable? Wazza copay? Wazza pay ment?
Obama say it be free!!!!!
17 weeks ago
17 weeks ago Link To Comment
What makes everyone assume they can't get the number of health young enrollees up to whatever number they want. It's easy. Just raise the penalty tax to levels that the youth can't sustain. I'm sure someone in the Obama criminal hierarchy has already figured this out and they're just waiting until the fall elections to implement this little regulatory change.

This was never about health care or health insurance. It's always been a power and money grab by Obama and his crew. For that, it's only necessary to keep lying to the lambs until they get sheared. When the middle class is broken, there will be no one to stop Obama turning the US into his own little fascist-socialist state.

17 weeks ago
17 weeks ago Link To Comment
What makes you think the youth they are aiming at can ever afford any of these policies? So far all the ones I know that didn't have it have lost ten hours a week AND a simple form of health care coverage supplied by their employers. So now they have to pay a couple hundred bucks a month premiums, and will never even cover the yearly deductible in medical costs.
Maybe if Obamagas didn't cost twice what it was, they could drive to another job to pay the premiums. Now, they mostly carpool or ride bikes, which limits job earnings severely.
Let's face it. They won't ever pay it because they can't, a quaint idea that the government hasn't understood for decades, since Reagan made parity of public pay with private pay. This doesn't work because they never get laid off or fired, and get continual COLAs, so now they truly are our masters.
These scum need to be drawn and quartered. And these kids might just get mad enough to do it.
17 weeks ago
17 weeks ago Link To Comment
Can't make an omelet without breaking a few eggs, y'know.

The path to socialism is paved with the bodies of useful idiots.
17 weeks ago
17 weeks ago Link To Comment
Laszewski doesn't make any sense.

Getting part of the premium paid by the tax payer doesn't make health insurance any more attractive to poor people, because they still have to pay, on average, the $2,500 deductible before getting any medical care.

The problem these days is, thanks to Obama's policies, there are a lot more poor people. Obamacare will never work, and will eventually be repealed.
17 weeks ago
17 weeks ago Link To Comment
I don't get why Obama is proud of the number of signups. Regardless of how many.
He's basically saying, "I made it mandatory and threatened people and look, they obeyed, Yeah Me!"
So?
17 weeks ago
17 weeks ago Link To Comment
The analogy may be, as Winston Churchill put it about something similar but different: "Like standing in a bucket and lifting yourself up by the handle".

Can't be done. So government says, "Hmm, need a bigger bucket!".

Government cannot anticipate unexpected consequences. Never has, never will. That's "negative thinking" and cannot be tolerated.

Trash it, start over, keep GovCo out of it entirely, allow interstate commerce, let insurance companies flourish.

How hard can it be?
17 weeks ago
17 weeks ago Link To Comment
"... unless most of those eligible for subsidies sign up."
===
This should read ".. unless most of those eligible for tax money sign up.
17 weeks ago
17 weeks ago Link To Comment
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