The painful costs of Oba­macare

Work­ers are squeezed be­tween higher de­ductibles and flat­tened pay

The Washington Times Weekly - - Editorials -

Just when it looked like Oba­macare couldn’t get worse, new sta­tis­ti­cal ev­i­dence shows that it can, and has. Healthcare in­sur­ance is get­ting more ex­pen­sive for most work­ers be­cause of an in­crease in de­duc­tions.

Em­ployer-pro­vided health plans defy ear­lier pre­dic­tions that the num­ber of such plans would fall in the face of new Oba­macare reg­u­la­tions. While the over­all num­ber of plans did not de­crease ap­pre­cia­bly, sub­scribers were hit this year with big jumps in de­duc­tions, the part of med­i­cal bills in­sur­ers won’t pay. Nearly 1 in 10 of such de­duc­tions range up­ward from a thou­sand dol­lars. The av­er­age worker will pay more for med­i­cal ex­penses than ever. The clear mes­sage is, “you’re in­sured, but don’t get sick.”

The in­creases con­tinue a grow­ing trend. The av­er­age de­ductible has more than tripled, from $303 in 2006 to $1,077 this year. This is part of the ex­pla­na­tion of why wages have flat­tened. Work­ers have cho­sen med­i­cal in­sur­ance ben­e­fits in­stead of higher wages. These de­ductibles have in­creased more than seven times the in­crease in wages. In­creases in med­i­cal in­sur­ance premi­ums have ac­tu­ally fallen by 1 per­cent over 2014, fall­ing for the first time in a decade, though the cost of fam­ily plans are up 3 per cent.

The Af­ford­able Care Act, the po­lite name for Oba­macare, was in­tended to sup­ply sub­si­dies to off­set in­creases in premi­ums. But apart from dif­fi­cul­ties in get­ting these sub­si­dies in place — state-ad­min­is­tered funds ver­sus fed­eral funds — the grow­ing dif­fi­culty for the av­er­age worker is an in­crease in de­ductibles (and co-pays) rather than more ex­pen­sive premi­ums.

A Kaiser Fam­ily Foun­da­tion study re­ports the av­er­age de­ductible for a gen­er­ous plan this year is $2,500 or more. Pre­dic­tions that this would un­der­mine com­pany plans is now be­ing borne out. This trend is fur­ther re­in­forced by the so-called em­ployer man­date in Oba­macare, which re­quires em­ploy­ers of a hun­dred or more em­ploy­ees to pro­vide health ben­e­fits; this be­comes 50 or more em­ploy­ees in 2016. Busi­ness­men ar­gue that this re­quire­ment costs jobs, and ac­counts in part for the grow­ing struc­tural un­em­ploy­ment even as the econ­omy slowly sput­ters to life. Man­agers are re­luc­tant to add work­ers and try to stay un­der those ceil­ings.

Another piece of bad news in the Kaiser study is that the Oba­macare’s 13 per­cent tax on so-called “Cadil­lac” plans has led many com­pa­nies to with­draw them. Op­po­si­tion to the tax is com­ing as much from the Obama ad­min­is­tra­tion’s usu­ally loyal unions as from busi­ness com­pa­nies.

It’s tempt­ing to say to the pres­i­dent and his in­com­pe­tent fix­ers that we told you so. But we won’t. The slap-dash, do-it-be­fore­any­one-looks Obama ad­min­is­tra­tion’s at­tempt to solve the in­fin­itely com­pli­cated short­com­ings of the med­i­cal care sys­tem, com­pris­ing a sixth of the econ­omy, with one magic pill was in­evitably doomed. No one should min­i­mize the dif­fi­culty of match­ing tech­nol­ogy, ex­pen­sive in its ini­tial de­vel­op­ment, to the de­mands of an ag­ing pop­u­la­tion. Crit­ics of Oba­macare who are tempted to search for another magic pill should be care­ful. Mir­a­cle cures are al­ways fraught with peril.

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