Commentary

How Is Obamacare Working?

We haven’t heard much about Obamacare from the media lately (with the exception of Paul Krugman, who slips a paragraph into every other column — regardless of topic — to tell us how well it’s working). It’s as if both supporters and opponents of the health-care law are holding their collective breaths as they wait for the Supreme Court, which is expected to decide any day now whether the law will be able to survive in its current form.

Obamacare’s opponents have mostly been caucusing behind closed doors trying to decide whether and when to offer an alternative — and how much to offer — should the Court require the law to be implemented as written — that is, without subsidies on federally run exchanges.

The law’s advocates, meanwhile, may have been left speechless by the news that Obamacare has tied an all-time low for public support, according to the latest Washington Post/ABC News poll. Just 39 percent of registered voters back the law, tying an all-time low last reached in April 2012. Fifty-four percent oppose it, and while that’s not a record, it represents a six-point increase in opposition over the past year.

As we await the Supreme Court’s decision on subsidies, an interim report.

Or maybe the law’s supporters simply have little response to the ongoing spate of news suggesting that, Krugman notwithstanding, the law is still not working very well. For example, insurance companies have begun submitting their requests for rate increases for 2016, and those requests suggest that premiums could skyrocket next year. Already we’ve seen requests for increases for individual plans as high as 64.8 percent in Texas, 61 percent in Pennsylvania, 51.6 percent in New Mexico, 36.3 percent in Tennessee, 30.4 percent in Maryland, 25 percent in Oregon, and 19.9 percent in Washington. Those increases would come on top of premium increases last year that were 24.4 percent above what they would have been without Obamacare, according to a study from the National Bureau of Economic Research. At the same time, deductibles for the cheapest Obamacare plans now average about $5,180 for individuals and $10,500 for families.

In fairness, those rate-hike requests are just that — requests. State regulators are likely to trim them back, significantly in some cases. And other insurers in those states may be seeking smaller increases. We haven’t seen any data weighting increases by the number of people covered, so we should be careful about overstating the impact. In addition, many people are insulated from the true cost by the law’s subsidies, which is what makes the upcoming Court decision so important. Still, to recall P. J. O’Rourke’s famous dictum, if we thought health insurance was expensive before, look at it now that it is free.

New evidence also suggests that Obamacare is struggling to meet its goals for covering the uninsured. According to a report in Investor’s Business Daily, the Obama administration estimates that roughly 10.2 million people have enrolled in Obamacare plans and paid at least one month’s premium. This meets the White House’s revised sign-up goal announced late last year, though it falls below the Congressional Budget Office’s earlier projections. The CBO had originally projected some 12 million sign-ups through 2015, later lowering that estimate to 11 million. So, while we should recognize that Obamacare has significantly increased coverage, there clearly is a long way to go.

A very long way, in fact. The CBO still hopes for 21 million enrollees next year, which would mean more than doubling current sign-up levels. Anyone see that happening? But failure to meet those numbers would mean that Obamacare would continue to flirt with the possibility of an adverse-selection “death spiral,” which could take down the entire insurance market. Already, insurance companies are warning that exchange enrollment is weighted too heavily toward sicker and older patients. And the Republican Congress is unlikely to renew bailouts designed to protect insurance companies from such adverse selection.

Of course these numbers do not count the nearly 7 million people who signed up for Medicaid because of Obamacare’s expansion of the program. But given the increasing evidence that Medicaid provides dubious value in terms of health outcomes, how this will affect federal and state budgets remains an open question. To cite just one example, getting poor people enrolled in Medicaid was supposed to reduce the strain on overburdened emergency rooms, by steering patients toward primary and preventive care. But the low physician-reimbursement rates under Medicaid mean that few physicians will treat Medicaid patients. As a result, emergency-room visits have actually increased under Obamacare.

Very soon the Supreme Court will rule on Obamacare’s subsidies. But for the law as a whole, the verdict is already in. By almost any measure, Obamacare is a failure.