With the news of higher premiums heading our way, the stories of cost savings greatness subsided and the Obama Administration went into full damage control mode. Across the news networks and social media, those in support of the Affordable Care Act were working overtime to squash the stories of skyrocketing premiums that were developing. It was a daunting task with no defense but like good party soldiers, they persisted.
New York Became Obama’s Poster Child
The only bright light to the repeated claims of lower premiums was the State of New York.
Back in the 1990’s then New York Governor Mario Cuomo put forth a series of reforms aimed to lower the number of the uninsured in his state. The reform measures were a debacle and drove insurance rates in the state to the highest in the nation. Of course skyrocketing rates meant that more New Yorkers would become uninsured, driving the state’s insurance industry into a death spiral of which they never recovered from.
Fast forward to2013 and the months heading into the rollout of the HealthCare.gov website. It was at this time that news began to trickle in from leading industry sources and insurers themselves which started to paint the picture of how healthcare premiums were shaping up across the country. The news was not following the administrations talking point of lower insurance premiums with one exception, the State of New York! The new rate structure brought forth by ObamaCare was, for this single state, a vast improvement over their very broke healthcare insurance system.
And so, on the eve of the inaugural HealthCare.gov rollout, New York’s Governor Andrew Cuomo announced to New Yorkers that those seeking healthcare insurance would find rate reductions as much as 50% once the states healthcare exchange opened for business in the coming hours.
New York was one of only three or four states that realized a reduction in healthcare insurance premiums under the new regulations put forth by ObamaCare and the only state where the reductions were substantial. With insurance rate increases of 40% on average being realized in virtually every other state across the country, it did not take long for the news media to fill the headlines with stories of double digit premium increase.
Yet despite the fact that only one of fifty states and DC delivered on the promise that premium would be lower, immediately following New Yorks Governor Andrew Cuomo’s announcement, President Obama stood before a national audience and claimed a victory for ObamaCare making New York his lower premium poster child. In his victory speak, the president did not find it necessary to disclose that New York was an isolated case nor did the president find it necessary to mention that most of the nation would be seeing double digit rate increases.
The Talking Point Changes
The disastrous rollout of the HealthCare.gov website turned the attention away from skyrocketing healthcare premiums just long enough for the Obama Administration to come up with a new battle plan.
Needing to continue with the years long promise that ObamaCare would lower healthcare premium, a new qualifier was added to the talking point. Never before tied to the claim of lower premiums, the Obama Administration was now and would forever add the small caveat of “with subsidies” whenever making the claim the ObamaCare has lowered premiums.
Taxpayer funded subsidies where always a major selling point of ObamaCare however, not until it was revealed that premiums increased almost universally did they become part of the talking point. President Obama had for years proclaimed that ObamaCare would drive healthcare insurance premiums down, never attaching subsides to the claim. Until this point, subsidies had always been touted as a benefit that would drive additional affordability into the cost of healthcare, not be the mechanism which created the affordability. As it turned out, even with subsidies, a significant percentage of individuals who purchased a qualified healthcare plan still ended up paying higher premiums.
A New Era of HealthCare Insurance
As a result of intense negotiations between the president and insurers, to hold premiums down, we arrived at the second round of ObamaCare enrollment to find significant changes to many healthcare plans. Some plans offered during the initial open enrollment period have been canceled while others have had rate structure changes.
Health and Human Services (HHS) Secretary Sylvia Burwell earlier stated that rate stability in the marketplace is not expected to come for several years as insurers look for ways to attract new customer as well as to retain their existing customer base.
Lower premiums and affordability are no longer the talking points of ObamaCare. Instead, both HHS and the president himself have gone on a campaign urging people to “shop for the best deal”.
And what exactly does “best deal” mean? For most consumers it means that they will be seeking out an insurance plan that provides a lower premium to offset the rate increase they have incurred. It is a tradeoff however, as with lower premiums almost always comes higher deductibles, higher co-pays and fewer options, all tools that insurers must use to balance their costs. We mustn’t lose sight of the fact that ObamaCare did not reform healthcare costs, it merely imposed massive regulations therefore making it impossible for insurers to lower the cost of one component of a healthcare plan without raising the cost of another.
So, for the foreseeable future anyway, annual shopping for the best healthcare insurance deal will likely be the new norm. If this is the case then gone are the days of establishing long term relationships with your doctor and for many, it may mean longer trips to visit a doctor when affordable healthcare cannot be found locally.
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