By J.D. Heyes
According to the Los Angeles Times, a recent analysis of cost data projections by the Department of Health and Human Services regarding government expenditures related to Obamacare found that initial costs for the program were billions of dollars higher than projected.
It should be noted that, within a few days of the LA Times report (which can be read here), the paper essentially retracted its conclusions, but more on that in a moment.
The original HHS report said that large taxpayer-funded subsidies which were provided to help cover health insurance costs for lower-wage workers, and which helped fuel the successful drive to enroll about 8 million in Obamacare, were on track to cost billions more dollars this year than expected.
The Times, citing the government report, said that nearly nine in 10 Americans who bought coverage on the federal government’s healthcare marketplaces were receiving some level of government assistance to offset premium costs.
Lower costs than projected, but at a price
The HHS report noted that such assistance helped lower premiums for consumers who purchased healthcare coverage at federal marketplaces by 76 percent on average. Premiums that normally would have cost an average of $346 a month instead cost consumers only about $82 dollars, with taxpayers picking up the remainder of the bill.
And while those subsidies are generous, for sure, they obviously have come at a price for other Americans asked to foot the bill. The Times elaborated on the HHS findings:
The report, though missing data from some states, paints one of the fullest pictures to date of the actual cost of the 2010 healthcare law’s coverage expansion.
It suggests that the federal government is on track to spend at least $11 billion on subsidies for consumers who bought healthcare plans on marketplaces run by the federal government, even accounting for the fact that many consumers signed up for coverage in late March and will only receive subsidies for part of the year.
The total supposedly did not include additional costs for providing coverage to millions of extra consumers who purchased coverage in states that set up their own marketplaces; those include California, Connecticut, Maryland and New York. The government report noted that about one-third of the 8 million people who enrolled for coverage this year used a state-run marketplace. Federal officials said that subsidy data for those people was not available.
The Times originally reported that, if those state consumers received about the same taxpayer assistance for their insurance premiums, then total costs for subsidies this year could surpass $16.5 billion.
The Times noted that making precise calculations is proving tough because of anticipated fluctuations in enrollment through the year. The Times said that these totals would roughly be in line with projections from the nonpartisan Congressional Budget Office (CBO).
The state-based marketplaces were a centerpiece of the so-called Affordable Care Act, but the Supreme Court ruled that states do not have to participate by establishing their own exchanges, because that would constitute an illegal federal expansion of Medicaid.
Under the law, consumers who make less than four times the federal poverty level, or about $94,000 a year for a family of four, qualify for insurance premium subsidies.
What does it really mean
Now, regarding the Times‘ retraction, which officially stated:
FOR THE RECORD
June 18, 10:30 a.m.: Because of an error in calculations, a previous version of this article incorrectly stated that a new federal report indicates that the cost of insurance subsidies under President Obama’s healthcare law may be running above current projections. The figures in the report actually suggest that the cost of the subsidies is roughly in line with current projections from the Congressional Budget Office.
In April, the CBO actually lowered its estimates of the cost of Obamacare over the next decade, saying that the law would cost taxpayers about $165 billion less than initially projected.
Good news, right? Not really.
According to The Wall Street Journal, Obamacare’s costs fell, because insurance companies, working to cut their own costs, have redesigned plans to offer fewer physician options (narrower networks) and lower reimbursement rates. That means, essentially, that patients buying insurance through an Obamacare exchange will get fewer doctor choices in two ways: a) by design of the plan; and b) because more doctors will drop out of networks altogether because of rotten reimbursement schemes.
The thing is, just because President Obama and Democrats “proclaimed” in a law that Americans will get more and better health insurance coverage and healthcare doesn’t make it so. The market, as it has always done, will decide that.
Finally, if it is anything at all, Obamacare is another massive taxpayer-subsidized government benefit promise that is unsustainable, like the government’s other massive, unsustainable programs in Medicare and Medicaid.
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