Tags: Barack Obama | Health Topics | Healthcare Reform | obamacare | signups | dominated | very poor

Obamacare Signups Dominated by the Very Poor

By    |   Thursday, 02 Apr 2015 10:06 PM

The latest numbers are bad news for Obamacare supporters who hoped to finance the program by persuading healthy young people to pay disproportionately high premiums on the insurance exchanges, the Galen Institute's Grace-Marie Turner writes in Forbes.

Turner links to a blog post by Doug Badger, formerly a senior White House adviser under President George W. Bush, who has examined the latest Obamacare enrollment figures and found that "only the poorest among the uninsured have so far signed up" because the more affluent have decided that the coverage isn't worth the price.

Badger's analysis, entitled "Obamacare: The More You Pay, The Less You Get," covers the results of the latest Obamacare open season which ended Feb. 15.

At first glance, the numbers seem encouraging, he writes: "Nearly 11.7 million people selected a plan this year, compared with just more than 8 million during the 2014 open season."

But when Badger more closely examined the figures, they created reasons for concern.

That is because enrollment "has been dominated by those with the lowest incomes. [The Department of Health and Human Services] reports that 83 percent of people who have selected plans have incomes between 100 percent ($11,770) and 250 percent ($29,425) of the federal poverty level (FPL)."

Meanwhile, Medicaid "has grown by nearly 20 percent since Obamacare was launched, swelling its ranks to 70 million. Roughly 22 percent of the U.S. population is now on Medicaid, despite the refusal of 22 states to expand their programs."

Badger cites a recent study by the Avalere consulting firm reinforcing his findings, showing that Obamacare has "attracted the poor and near poor and holds little appeal for uninsured middle-income people."

He explains that the design of Obamacare's subsidies is the reason, because "as premiums rise, the value of insurance coverage falls."

Badger contends that Obamacare has thus far worked as "an income transfer program in which middle income people finance Medicaid expansions and health insurance subsidies for the poor and near-poor."

Most uninsured middle-class Americans have decided not to buy health insurance "because the coverage isn't worth the price," he writes, because "their taxes are subsidizing coverage for others."

It "seems unfair to hit them with an additional tax for refusing to buy insurance for themselves, especially when that coverage is less valuable than the coverage they are subsidizing for others."

Badger concludes that "Obamacare's 'pay more, get less' regime has made remaining uninsured an economically rational decision even for millions of people who are eligible for subsidies." This may explain "why the government is underachieving in its efforts to persuade millions of people to buy a product they just don't think is worth the price."

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The latest numbers are bad news for Obamacare supporters who hoped to finance the program by persuading healthy young people to pay disproportionately high premiums on the insurance exchanges, the Galen Institute's Grace-Marie Turner writes in Forbes.
obamacare, signups, dominated, very poor, middle class, Medicaid, doesnt work
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2015-06-02
Thursday, 02 Apr 2015 10:06 PM
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