8 Reasons Why Obamacare Should Be Repealed

COMMENTARY Health Care Reform

8 Reasons Why Obamacare Should Be Repealed

Feb 6, 2017 4 min read

Former Policy Analyst, Domestic Policy Studies, Institute for Family, Community, and Opportunity

Alyene Senger researched and wrote about the Affordable Care Act, Medicare, and conservative solutions to health care challenges.
Seven years after Obamacare's passage, insurance premiums are surging, patient choice has diminished, and state exchanges are collapsing. iStock Photos

As the debate over repealing Obamacare intensifies, it’s important to remember the law’s most glaring failures.

Here are eight:

1) Costs

Despite repeated promises of premium reductions, Obamacare has delivered major increases.

In the employer-sponsored market, costs continue to increase. According to the Kaiser Family Foundation, average family premiums for employer-sponsored plans have increased almost 32 percent from 2010-2016.

In the individual market, where the bulk of Obamacare’s new rules and regulations have taken effect, the average nationwide premium increase has been 99 percent for individuals and 140 percent for families from 2013-2017, according to an eHealth report.

Deductibles keep rising, too, especially for Obamacare exchange plans. According to an analysis by HealthPocket, the average deductible for a bronze plan in 2017 is $6,092 for an individual and $12,383 for a family. The average silver plan deductible for an individual is $3,572 and $7,474 for a family.

2) Choice and Competition

Relative to the individual market prior to the law’s implementation, insurer competition has always been limited on Obamacare’s exchanges. However, competition has continued to decline, with 2017 being the worst year yet.

Forthcoming Heritage Foundation research finds that 70 percent of U.S. counties have only one or two insurers offering coverage on the exchange in 2017.

3) Exchange Enrollment

The Obama administration estimated that the average monthly effectuated enrollment in the exchanges was 10.4 million people in 2016. This is significantly below original projections from the Congressional Budget Office, which estimated that 21 million people would be getting their coverage through the law’s government-run exchanges in 2016.

According to the IRS, in 2015, 12.7 million taxpayers claimed one or more exemptions from Obamacare’s mandate to purchase coverage and another 6.5 million taxpayers paid the penalty rather than sign up for coverage.

4) Exchange Websites

The federal government sent nearly $5 billion to states to set up their own health insurance exchanges. Despite the ample funding, the vast majority of states either didn’t want to set up their own, or tried and failed.

In 2017, only 11 states and the District of Columbia run their own exchange. The remaining 39 states use HealthCare.gov, which cost taxpayers at least an estimated $800 million to build. Recall that HealthCare.gov was only able to enroll six people on its launch date, Oct. 1, 2013.

5) If You Like Your Plan, but the Government Doesn’t, You Can’t Keep It

When Obamacare’s insurance rules and mandates took full effect in 2014, insurers were forced to cancel existing plans that didn’t comply with the new standards. A tally put together by the Associated Press shows that there were at least 4.7 million plan cancelations across 30 states.

6) Collapsed Co-Op Program

Obamacare provided for the creation of 23 new nonprofit health insurers through the Consumer Operated and Oriented Plan program. These insurers launched in 2014, using $2.4 billion in taxpayer-funded “loans.” Shortly thereafter, they began to collapse like dominos.

Some of the closures happened during the plan year, significantly disrupting coverage and the market. Thus far, 18 out of 23 have gone under, resulting in a combined $1.9 billion in government loans that taxpayers are highly unlikely to ever be repaid.

7) Dumping Millions Into Medicaid

Instead of reforming the over-stretched and unsustainable Medicaid program, Obamacare has dumped millions more people into it. After the first two years of Obamacare, an additional 11.8 million people were enrolled in the Medicaid program.

The law’s expansion is projected to add $969 billion in new Medicaid spending over the next decade, adding to existing Medicaid spending for a total federal cost of $3.8 trillion from 2017-2028.

8) Restricted Access to Providers

Obamacare’s increased costs have prompted narrow network plans to flourish on the exchanges—an unpleasant surprise for patients that desire broad access to providers. The Robert Wood Johnson Foundation measured network size for plans sold in the 2014 exchanges, finding:

Fourty-one percent of networks are small or x-small: 11 percent of networks are x-small, meaning they include less than 10 percent of office-based practicing physicians in the area and another 30 percent are small, including between 10 percent and 25 percent of physicians. At the other end of the spectrum, 11 percent are x-large, which we define as networks including more than 60 percent of physicians.  

For all these reasons and many more, Congress should repeal Obamacare as soon as possible to clear the way for health care reform that actually works for Americans.

This piece originally appeared in The Daily Signal

Donate to The Heritage Foundation

Our more than 100 policy experts and researchers are invited to testify before Congress nearly 40 times a year