Commentary

The Pain Begins

Today, six months since Congress passed the Patient Protection and Affordable Care Act, President Obama will be celebrating the signature achievement of his administration.

It’s apt to be a lonely celebration: Few Democratic candidates are willing to talk about the health-care bill — except the ones running ads to remind the electorate that they voted against it.

Still, the president will speak today before a group of state insurance regulators, while a coalition of labor unions and liberal activist groups organize rallies around the country. They’ll undoubtedly focus on some of the new law’s more popular provisions, many of which start today — while ignoring the mandates, taxes and rationing that will come later. Indeed, the provisions they’ll tout come with asterisks that they won’t mention.

For example, starting today parents will be able to keep their children on the parents’ insurance plan through age 25. But that doesn’t come for free. The Department of Health and Human Services estimates that doing so will cost an estimated $3,380 a year per child. And since employers are balking at picking up the added cost, the parents themselves will have to foot the bill.

Similarly, as of today, insurers can no longer impose lifetime or annual limits on benefits or refuse coverage to children with preexisting conditions. One can argue that these new rules are the best way to deal with thorny issues — but no one can claim that insurers will do these things out of the goodness of their hearts.

There’s no such thing as a free lunch. If you’re going to require insurers to cover more expensive customers and provide more benefits, it’s going to cost more — and those costs are going to be passed on to customers in the form of higher premiums. When New York implemented many of these same insurance rules in 1983, premiums rose by nearly $500 per policy — resulting in nearly 500,000 New Yorkers dropping their insurance.

Already this fall, we’re seeing premiums jump as much as 9 percent nationally next year, especially in the individual and small-group markets. Some customers are seeing hikes of 20 percent or more. And a significant portion of this increase is directly traceable to the new rules.

It may also get harder to find insurance. For example, several major insurers have just announced they will no longer sell “child only” insurance plans — because they can’t afford to comply with the new preexisting condition rule.

Today, the president will almost certainly highlight projections that health-care reform will eventually provide coverage to some 30 million more Americans. He won’t note that that’s years off — or that roughly half of those newly insured are merely being dumped into the Medicaid system, with all its problems in access and quality.

You also won’t hear much about the fact that the government’s own actuaries have now concluded that the health-care law will actually increase health-care spending, contrary to the president’s promises before the bill passed. Nor will you hear that outside experts now predict that ObamaCare will cost as much as $2.7 trillion over its first 10 years of actual operation, adding more than $350 billion to the deficit over that period despite massive new taxes.

At least Obama probably won’t repeat his old refrain, “If you have insurance today and you like it, you can keep it.” That’s because it’s getting harder and harder to find anyone who can keep their current insurance plan.

For example, we’ve now learned that college students receiving limited-benefit policies via their universities won’t be able to keep those. (I guess it’s a good thing they’ll be able to go back on their parents’ plan.) Similarly, at least a million seasonal workers will lose their plans because they fail to meet the government’s new benefit requirements.

In fact, a memo leaked from Obama’s Health and Human Services Department estimated that as many as two-thirds of all businesses and 80 percent of small businesses will be forced to change their plans to comply with the government’s new rules. And roughly half of seniors who now participate in Medicare Advantage will be forced out of those plans and back into traditional Medicare.

Still, as we reach this six-month milestone, there is one thing about health-care reform that we can celebrate. According to the latest Rasmussen poll, 61 percent of Americans want the law repealed.

The president probably won’t mention that, either.

Michael Tanner is a Cato Institute senior fellow.