March 30, 2015 | Commentary on Obamacare, Health Care Reform

Are we better off now, five years into Obamacare?

Obamacare just passed its fifth anniversary as a law, but don't be surprised if you didn't hear much about it. After all this time, polls show the public still doesn't like it.

Results are more important than perception, of course. So let's ask: If Obamacare is measured on four important metrics - cost, coverage, competition and choice - are we better off now?

Cost. When the law was being debated, President Obama promised the American people that it would reduce the average families' health care costs by $2,500 a year. But now it's clear that Obamacare's flawed policies have had the opposite effect. Far from dropping, costs have increased for the average consumer.

For those who purchase coverage through Healthcare.gov and the state exchanges, their premiums increased dramatically when the law was first implemented in 2014 compared to what comparable coverage cost in the individual market prior to the law's implementation. Furthermore, as a new Heritage Foundation analysis shows, premiums in the exchanges are continuing to rise in 2015, albeit at a slower rate compared to the huge 2014 increases.

Coverage. As Obamacare's coverage provisions took effect at the end of 2013, millions of Americans lost their existing health plan, as the law significantly disrupted the market for those who buy coverage on their own. The imposition of new coverage and benefit mandates resulted in a reported 4.7 million health insurance cancellations in 32 states in 2013.

The same is true for those with employer-sponsored insurance. During the first nine months of 2014, a Heritage analysis of the insurance market enrollment data found: (I)ndividual-market enrollment grew by 5.83 million, but 4.93 million individuals lost employer coverage - offsetting 85 percent of the individual-market gain. Thus, the net increase in private health insurance for 2014 is so far 893,000 individuals.

During this same period, Medicaid enrollment grew by almost 7.5 million. Taken together, health coverage increased by 8.38 million, with Medicaid coverage making up 89 percent of the gain. Unfortunately, Medicaid has a long history of lower quality and less access to care than private insurance. Instead of expanding the already shaky program the way Obamacare has done, Medicaid should have been reformed to work better for the most vulnerable populations.

Competition and Choice. Another stated goal of Obamacare was increased insurer competition - another area, unfortunately, where the law has not only failed, but made matters worse. If you compare insurer participation in Obamacare's exchanges to the individual market prior to the law's implementation, you find that the exchanges are about 21 percent less competitive at the state-level in 2015.

State-level numbers on insurer competition often overstates the actual choice available to consumers because insurance is generally priced and sold on a county or regional basis. Indeed, one-third of the nation's counties only have one or two insurers offering coverage on their Obamacare exchange in 2015. That means insurer choice is either incredibly limited or non-existent for consumers in these areas.

Another 25 percent of counties only have three insurers offering coverage. Thus, the exchange market in 57 percent of U.S. counties features competition among three or fewer insurers in 2015.

As a whole, Americans are not better off now than before Obamacare was enacted. It's time for a change. A change toward patient-centered reform that empowers individuals to control their health care dollars and make their own decisions.

Market-based reform would put individuals in charge of their own health care and reward value by creating consumer pressure on providers to increase quality and decrease costs. Reform should be about individual choice, not government mandates.

 - Alyene Senger is a researcher in the Center for Health Policy Studies at The Heritage Foundation.

About the Author

Alyene Senger Research Associate
Center for Health Policy Studies

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