AMAC Exclusive – By Andrew Abbott
Nearly 14 years after the passage of the Affordable Care Act, commonly referred to as “Obamacare,” President Joe Biden is doubling down on some of the worst aspects of the policy.
Last month, Biden moved to eliminate short-term private health plans that currently function as a far more affordable alternative to Obamacare. These plans, which have flexible coverage periods ranging from 30 days to three years, can also be obtained any time of the year rather than just during the Obamacare open enrollment period.
The short-term plans are a legacy of former President Donald Trump, who eased restrictions on them in 2018. President Barack Obama had initially limited the term of such plans to three months in 2016 amid concerns that consumers would eschew the more expensive Obamacare plans.
Now, Biden is hoping to limit short-term plans to four months with no option for renewal. Notably, patients who are enrolled in such plans and lose their coverage won’t be able to enroll in Obamacare until the open enrollment period the following January.
According to estimates from the Congressional Budget Office, Biden’s proposed rule would kick 1.5 million people off their current plans, and 500,000 people would lose coverage entirely. So much for Biden’s promise that if you like your private insurance, “you can keep it.”
If Biden’s latest proposed rule takes effect, Americans with short term plans will likely see a repeat of the horrors that befell the country following the signing of Obamacare in 2010.
Much like Biden’s broken promise, Obama also pledged that Americans who liked their insurance could keep it (a claim NPR dubbed the “lie of the year”). In fact, a key talking point in the passage of the bill was that it would not impact existing health insurance plans at all.
Within months of the bill’s passage, however, millions of Americans were shocked to find their health insurance plans were canceled for not meeting the requirements of Obamacare. According to Rep. Paul Gosar (R-AZ), an estimated 4.7 million people lost their healthcare in the first years of the Obamacare regime.
Another key promise was that Obamacare would bring down the overall cost of healthcare in America. In early 2010, President Obama stated that the bill would “cut the cost of a typical family’s premiums by up to $2,500 a year.”
In practice, healthcare costs saw a dramatic spike following the bill’s passage. According to the Department of Health and Human Services, from 2013 to 2017, the average individual market premium shot up 105 percent from an annual cost of $2,784 to $5,712.
Obamacare premiums are even more astronomical. The average cost of Obamacare plans for an American family today is over $18,000 per year. In 2021, when family premiums were $17,000, average deductibles were still nearly $8,000, making the policies worthless for the vast majority of Americans. A family might spend $25,000 in a year before seeing any major benefit.
Under these conditions, it is no surprise that lower-cost short term private plans, which President Trump allowed to be extended for years, were quickly making Obamacare obsolete.
Defenders of Obamacare point to the fact that more Americans got insurance after the bill’s passage. Yet this was largely due to the bill’s infamous “individual mandate,” which imposed steep penalties on anyone who did not purchase healthcare.
The individual mandate scheme was even more sinister given the fact that costs were artificially lower at the beginning due to government subsidies with sunset clauses. Once those subsidies ran out, people found themselves struggling under the weight of ever-higher premiums, so much so that many simply opted to pay the penalty rather than continue enrolling in healthcare coverage they couldn’t afford.
Short-term plans have provided welcome relief from this impossible situation. But now, Biden is aiming to crack down on healthcare freedom once again.
Congressional Republicans, meanwhile, have made multiple efforts over the years to “repeal and replace” Obamacare, to varying degrees of success. By far, the most substantive and effective effort occurred during the Trump administration. While the congressional push to repeal Obamacare failed, Trump and the Republican controlled Congress succeeded in reducing the individual mandate penalty to zero. They also relaxed some of the regulations so individuals could seek short-term plans with greater flexibility than the “once-size-fits-all” plans offered on the Obamacare market.
Yet, for all its shortcomings and failures, Democrats seem to believe that the only problem with Obamacare is that everyone isn’t using it. They claim that forcing all Americans onto one set of plans by government edict will give people greater leverage over insurance companies and lower costs. Or, put another way, they think eliminating low-cost plans will somehow make Obamacare plans cost less.
Thus far, however, all the evidence points in exactly the opposite direction.
Andrew Abbott is the pen name of a writer and public affairs consultant with over a decade of experience in DC at the intersection of politics and culture.
