The Department of Health and Human Services [HHS], the federal agency overseeing the roll out of the Affordable Care Act [ACA], or Obamacare as it's become known, released a report Wednesday that shows the affordability and availability of health plans under the ACA. Americans who qualify for tax credits through the new federal insurance exchange are paying an average of $82 a month in premiums for their coverage—about one-fourth the bill they would have faced without such financial help.
Since October 1, 2013, the report notes, over eight million Americans have selected a private health insurance plan through the Marketplace, the vast majority of whom are receiving financial assistance—making coverage even more affordable. For many that is good news, but for others, like Ohio Lt. Gov. Mary Taylor who also directs the state's insurance department that regulates insurers, that news was immediately dismissed.
In a statement from Taylor spokesman Chris Brock to CGE, it's all too good to be true. "After promises of lower health insurance premiums for Americans and a commitment that if you liked your plan, you could keep your plan, Obamacare has failed to deliver," he said via email. "Premiums are rising faster in Ohio today than before Obamacare harming job creators and consumers at a time when our economy is recovering and growing."
According to reporting on the 28-page report, there exists wide variations among states in the premiums that people are paying for their new insurance, the amount the government is picking up and the proportion who qualify for the subsidies. The first sign-up period that started last October got off to a terribly rocky start, giving Republicans like Taylor and her boss Gov. John Kasich, running for a second term this year, plenty of ammunition to fire at the ACA as a flawed program that's only made America's system of private insurance even worse than before the ACA was approved by Congress and signed into law by President Obama in March of 2010.
The passage of the ACA is largely cited as the flash point bill that energized the formation of the Tea Party that year, a midterm election year in which the GOP won an impressive 63 seats in the U.S. House of Representatives, returning control of the people's chamber to GOP control. Since Republicans took back the House, gridlock in Washington has been ever present, so much so that Republicans shutdown the government for over two weeks last year at a cost of about $25 billion.
One statistic from the report backers of the ACA will cheer but its critics will jeer is that the new federal insurance exchange—which Ohio participates in because Kasich and Taylor decided early on immediately after the U.S. Supreme Court ruled the ACA constitutional—are now paying an average of $82 a month in premiums for their coverage, an amount that's about one-fourth the bill they would have faced without such financial help.
Brock cited a recent survey from Enroll America that said 48 percent of consumers did not try to buy coverage due to cost concerns and said what that subsidization looks like in terms of real dollars has been overlooked. In Ohio specifically, he said, HHS reported the average premium before subsidy was $372 per month and $111 after subsidy. "If that is correct, that means – on average – each enrollee is getting a $261 per month subsidy paid for by taxpayers. Multiply that by 154,000 Ohioans who selected a plan and if my math is correct, that's $40 million per month in federal tax subsidies or nearly $500 million per year in Ohio alone."
Another conservative view of Obamacare that chaffes at findings in the HHS report can be found in this report at Forbes.com, which looks at data more than 3,000 counties across the nation and concludes that Obamacare has increased 2014 individual-market premiums by an average of 49 percent.
Under the ACA this year, the government started to help pay for private insurance coverage in the new marketplaces for people whose incomes reach into the middle class for the first time—the lower the income, the higher the tax credit. Among the 50 states, California and Florida lead the way for state and federal health-care sign-up markets. HHS has previously reported that 87 percent of the 5.4 million Americans who chose a health plan through the federal health exchange qualified for some financial help.
Highlights of the report: Individuals who selected plans in the federally facilitated market [FFM] with tax credits7 have a post-tax credit premium that is 76 percent less than the full premium, on average, as a result of the tax credit—reducing their premium from $346 to $82 per month. Sixty-nine percent of individuals selecting plans with tax credits in the FFM have premiums of $100 or less after tax credits—nearly half (46 percent) have premiums of $50 or less after tax credits. Individuals choosing silver plans in the FFM tended to select lower premium plans—65 percent chose the lowest or second-lowest cost silver plan. Most individuals had a wide range of health plan choices. Eighty-two percent of people eligible to purchase a qualified health plan live in rating areas with 3 to 11 issuers in the Marketplace; 96 percent live in rating areas with 2 to 11 issuers in the Marketplace. Competition, as measured by the number of issuers in a rating area, is associated with more affordable benchmark plans (the second-lowest cost silver plan) for individuals and reduced costs for the federal government. An additional issuer in a rating area is associated with a 4 percent lower benchmark premium. Areas with a greater number of issuers also tend to offer a wider range of choices among plan types (e.g. PPOs, HMOs, CO-OP) to better meet consumers’ preferences and financial needs.
Washington Post reporter Amy Goldstein wrote that the average monthly tax credit this year is $264, and that "without the federal help, the average premium chosen by people eligible for a tax credit would have been $346 per month, and the subsidy lowered the consumers’ premiums, on average, by 76 percent." The result, she said, is that four out of five people with subsidies are paying premiums of no more than $100 a month, as she reminded readers that that figure does not include money that would pay for insurance deductibles and other out-of-pocket costs. The ACA put a ceiling on what the insured have to pay, a limit that did not exist before the law, and prevented insurance companies from denying coverage to people with so-called pre-existing conditions. Differences in prices among states was due to differences in their hospital industries and to how many of the health plans were lower-price HMOs, an official cited in WaPo's report said.
Meanwhile, a new study published in the Journal of the American Medical Association from a pediatrician at Boston’s Children’s Hospital finds an increase in the number of people who report they are in excellent physical and mental health and that this group has spent less out-of-pocket for health care, according to the LA Times.