Lost in all the recent debate about whether Obamacare should exist is this pertinent fact: With the rollout this month of new health insurance exchanges, it does exist — and it’s dramatically underperforming relative to the promises of its advocates.
Recall that when President Obama was touring the country, touting his proposed health care reforms, one of his most frequently employed arguments was that his plan would, in his Washington-speak formulation, “bend the cost curve down.” That curve is bending, all right — but not in the direction the president promised.
A recent report from the actuary at the Centers for Medicare & Medicaid Services estimates that cumulative health spending will increase by roughly $621 billion by 2022. This may come as an unpleasant surprise to some of the law’s supporters in Washington, but it makes intuitive sense to those of us who understand how markets function. Government simply cannot impose extensive new regulations on industry and expect the final product to be cheaper.
What these projections describe in the abstract will soon become a tangible reality for those willing to brave the morass of technical glitches and purchase insurance through Obamacare’s exchanges. Young, healthy Americans — precisely the people the program needs to bring into the market to cross-subsidize the elderly and infirm — are in for a dose of sticker shock.
A recent study by the Manhattan Institute concluded that 27-year-old women would face an average premium increase of 55 percent. For men of the same age, that number climbs to 97 percent.
Trying to get by with the bare minimum of coverage won’t be a cheap proposition, either. Research by the American Action Forum, for instance, concludes that a healthy 30-year-old man will see premiums for his lowest-cost insurance option increase by an incredible 260 percent. The Obama administration claims that it needs 2.7 million enrollees ages 18-35 to make the state exchanges work. With price increases like that, it’s doubtful that it will get them.
These price hikes are not purely a drain on the young, however. While touting Obamacare on the stump, the president routinely pledged that the average family would see its premiums decrease by $2,500 a year under the law. The reality? They’ve increased by $3,065 since he took office.
We note these failures more out of sorrow than triumph. While these pages have long opposed Obamacare, we would have preferred that these lessons about the perils of government intervention not have to be learned the hard way.
Alas, it’s now too late to avoid that fate. We can only hope that the impending hardship will hasten the day when the law meets its deserved demise.
The Orange County Register