Obamacare: Increasing Costs, Decreasing Coverage

By Sidra Ahmad

We have all heard of Obamacare—its handful of critics, its controversial reviews—ages before its official enactment. However, the administration has since signed millions of American onto the Obamacare health coverage, and according to Gallup, has decreased the uninsured rate among American adults by 6.5% in the last three years.⁵ Open enrollment began this past Tuesday, November 1, 2016, and coverage can begin as early as January 1, 2017.⁶ The enrollment period for 2017 health insurance ends on January 31, 2017.⁶ Despite Obamacare’s considerable benefits, according to The Fiscal Times, premiums are expected to rise by double digits in 31 states, but decrease in two states.⁷ Before we get into the details of the consequences of this major healthcare coverage change, let us discuss what Obamacare entails.

“Premium,” Defined

A premium is a monthly set cost a consumer pays for his or her health insurance. Along with this premium, other payments, such as a deductibles, copayments, and coinsurance; however, through the Marketplace, or Obamacare exchange, the premium costs can be lowered.⁹

What is Obamacare?

The Affordable Care Act, more commonly known as Obamacare, is a reformed health insurance law enacted by President Obama on May 23, 2010.³ The law gives the American people power over their own health by providing an adaptable yet secure enrollment and a more affordable, available option for all types of consumers.² For Americans who had inadequate health care insurance, or no health care at all, the Affordable Care Act provides dependable security.³

What benefits does Obamacare provide?

Obamacare provides the following benefits:^2,4

• Increasing coverage for young adults under their parents plan to age 26
• Children under 19 cannot be denied health care benefits due to pre-existing health conditions
• The right to appeal the decision of insurance company about payment for health services
• Preventing insurance cancellations
• Easy to understand copy of insurance plan as to provide consumer power of their health care
• No copayments or deductibles of any sort in order to receive preventative care

Increase in Premium Cost and Consumer Impact

Insurance companies involved in the Obamacare exchange have left the Marketplace and the remaining few are increasing their premiums to account for the enormous loss of expensive medical coverage that many consumers are recieving.¹¹ According to the Department of Health and Human Services, the average premium increase is 25%.⁸ Below is a map depicting the Obamacare premium increase varying by state:

“How average monthly premiums for a 27-year-old buying the second-lowest cost silver plan will change in 2017 from 2016”¹⁰

Source: The Washington Post

Forbes states that insurance companies make profit by ensuring that healthy people begin paying for health coverage from a young age. Consumers naturally only want to pay for a service when they need it; logically, only an ill individual would want to buy life insurance and/or health care for his or her family. By this accord, if only sick applicants bought insurance, businesses would lose major profit and go bankrupt. Therefore, insurance companies reject certain high risk applicants, and make it bold and clear, that if individuals want to have insurance when they are old and sick, they must begin to pay for it when they are young and healthy.¹²

However, because Obamacare doesn’t allow insurance companies in the Marketplace to reject any applicants due to preexisting health conditions, insurance companies are losing major profit.  Obamacare allows provide an option for healthy individuals to not enroll in insurance and pay a penalty instead. While this is extremely beneficial for people who need immediate and stable health coverage because of serious illnesses, insurance companies are backing out of the exchange or severely increasing their costs in this upcoming enrollment period.¹²

As a result of insurers dropping from the market, patients lose their health coverage and are left in worry.¹³ Consumers have fewer options, and certain individuals with serious illnesses may have to suffer through the effects of switching to a cheaper plan and starting anew. Some individuals may be lucky enough to be eligible for a government subsidy when they switch plans and can receive considerable help in paying their premiums.¹¹

References:

1. “Get 2016 Health Coverage. Health Insurance Marketplace.” gov. U.S. Centers for Medicare & Medicaid Services, n.d. Web. 05 Nov. 2016. <https://www.healthcare.gov/>.
2. Secretary, HHS Office of the. “About the Law.” gov. U.S. Department of Health & Human Services, 10 June 2013. Web. 05 Nov. 2016. <http://www.hhs.gov/healthcare/about-the-law/index.html>.
3. Secretary, HHS Office of the. “Key Features of the Affordable Care Act.” gov. U.S. Department of Health & Human Services, 07 June 2013. Web. 05 Nov. 2016. <http://www.hhs.gov/healthcare/facts-and-features/key-features-of-aca/index.html>.
4. Secretary, HHS Office of the. “Preventive Care.” gov. U.S. Department of Health & Human Services, 10 June 2013. Web. 05 Nov. 2016. <http://www.hhs.gov/healthcare/about-the-law/preventive-care/index.html>.
5. Gallup, Inc. “Uninsured Down Since Obamacare; Cost, Quality Still Concerns.” com. Gallup, Inc., 29 Aug. 2016. Web. 05 Nov. 2016.
6. “Official Marketplace Dates And Deadlines.” gov. U.S. Centers for Medicare & Medicaid Services, n.d. Web. 05 Nov. 2016. <https://www.healthcare.gov/quick-guide/dates-and-deadlines/>.
7. Herron, Janna. “Here’s How Much Obamacare Premiums Are Rising in All 50 States.” The Fiscal Times. The Fiscal Times, 1 Nov. 2016. Web. 05 Nov. 2016. <http://www.thefiscaltimes.com/2016/11/01/Here-s-How-Much-Obamacare-Premiums-Are-Rising-All-50-States>.
8. “Health Plan Choice and Premiums in the 2017 Health Insurance Marketplace.” Assistant Secretary for Planning and Evaluation (ASPE) (n.d.): n. pag. 24 Oct. 2016. Web. 05 Nov. 2016. <https://aspe.hhs.gov/sites/default/files/pdf/212721/2017MarketplaceLandscapeBrief.pdf>.
9. “Premium.” gov. U.S. Centers for Medicare & Medicaid Services, n.d. Web. 05 Nov. 2016. <https://www.healthcare.gov/glossary/premium/>.
10. Marte, Jonnelle. “Where Obamacare Prices Are Rising Dramatically.” Washington Post. The Washington Post, 01 Nov. 2016. Web. 05 Nov. 2016. <https://www.washingtonpost.com/news/get-there/wp/2016/11/01/where-obamacare-prices-are-rising-dramatically/>.
11. Abelson, Reed, and Margot Sanger-katz. “A Quick Guide to Rising Obamacare Rates.” The New York Times. The New York Times, 25 Oct. 2016. Web. 05 Nov. 2016. <http://www.nytimes.com/2016/10/26/upshot/rising-obamacare-rates-what-you-need-to-know.html>.
12. Clements, Nick. “Obamacare Premiums Increase 25%: Is The ‘Death Spiral’ Here?” Forbes. Forbes Magazine, 25 Oct. 2016. Web. 05 Nov. 2016. <http://www.forbes.com/sites/nickclements/2016/10/25/obamacare-premiums-increase-25-is-the-death-spiral-here/#252cc0b314d7>.
13. Tanner, Michael. “Obamacare’s Slow, Painful Unravelling Continues.” National Review. National Review, 02 Nov. 2016. Web. 05 Nov. 2016. <http://www.nationalreview.com/article/441662/obamacare-disaster-higher-premiums-less-coverage>.