The law clearly states that today is the final day to sign up for Obamacare. Only it isn’t. The extension announced last week covers anyone who merely claims they intend to apply. Allowing such a frivolous and unverifiable gesture to circumvent the law neatly captures the paternalistic arrogance of the White House and its signature legislation — only the intent matters. Pay no attention to the cavalcade of undesirable consequences; if we mean well, we can do whatever we want.
The old proverb tells us that the road to hell is paved with such good intentions. But in the short term, the Obama team’s obfuscations have paid political dividends. For example, media attention has centered lately on the gross number of enrollments — the assumption being that if that number reaches 6 million, the latest White House target, then everyone can declare victory and move on.
But the overarching objective of the Affordable Care Act was never a specific enrollment target or, say, smoothly running software. The goal was to dramatically reduce the number of Americans without health insurance while reducing costs. On that score an honest look at the numbers reveals true failure. The vast majority of those signing up to date were previously covered, a travesty given the bill’s 10-year cost of over $2 trillion.
Begin with the administration’s claim of 5 million enrollments at mid-March, and generously assume they reach 6 million by the deadline. Unfortunately, not all will pay. Analysts at Goldman Sachs estimate that about 20 percent of those who sign up won’t follow through, leaving 4.8 million bona fide Obamacare exchange participants.
How many were uninsured last year? The White House doesn’t seem to know or care. A nationwide survey of those eligible by McKinsey Consulting determined that between 11 and 27 percent were previously without coverage. Accepting the higher figure, the exchanges have taken 1.2 million off the rolls of the uninsured.
Additionally, the law expands Medicaid eligibility. While President Obama recently trumpeted about 6 million new enrollments, nearly half the total comes from states that chose not to expand the program. Most of those remaining were already eligible under the old rules. In short, the law provided new Medicaid coverage for roughly 500,000 people not previously eligible.
Ironically, a large number of new Medicaid participants probably come from companies that have scaled back insurance coverage because of Obamacare’s costs. Target, Walmart, and Trader Joe’s are the most notable among them, but there are scores of others accounting for tens of thousands of workers — perhaps hundreds of thousands. A bill that takes credit for helping to insure workers who lost insurance because of that bill is less a public policy than a shell game.
Finally, the tally of Obamacare beneficiaries should include approximately 3.1 million adults under age 26 who are now required to be covered under their parents’ policy. That leaves a grand total around 5 million, or $400,000 each under the bill’s cost.
From there, the math only gets worse. Each year, millions of uninsured Americans find coverage through a new employer, Medicaid, or other means. In fact, the number of uninsured has fallen every year since peaking after the 2008 recession. Many of the 1.2 million newly insured through the exchanges likely would have found coverage regardless. Moreover, we know that at least 5 million families have received cancellation notices. Some polices have been temporarily extended, and some have not, but all will lose their insurance once the law goes into full effect.
Lastly, we come to the really bad news: cost. For the young and healthy, rates have gone up dramatically. That’s by Obamacare’s design, and is one reason enrollment by those age 18 to 34 has been far lower that projected. For those over 60 and less healthy, rates will certainly be lower — for now. Last week Wellpoint, one of the country’s largest insurers, announced double-digit premium increases for exchanges next year.
Liberals have long derided a more cautious “piecemeal” approach to reducing the number of uninsured: ensuring low-priced catastrophic coverage for the young; allowing insurance competition on a nationwide basis; and more aggressively targeting subsidies for those in need. They failed to recognize that covering the uninsured is difficult, complex, and — as Massachusetts has learned — expensive. The first goal should have been to do no harm to those parts of the system that were working.
Instead, Obama has given us a $2 trillion fiasco that brought coverage to 5 million while canceling coverage for about the same number. Ezekiel Emanuel, one of the plan’s authors, recently said Obamacare will bring “the end of employer-sponsored insurance.” He and Obama may think that’s a good thing, but I’d guess most Americans do not. We’ll find out in November.