24 Million Losing Health Insurance? Not Really.

The Affordable Care Act (ACA), as The Washington Times noted, is “a public policy flop of epic proportions.”

It is costing much more and insuring far fewer Americans than projected, while adding a huge government bureaucracy to the healthcare system, which was heavily regulated even before the ACA. Even though every American must either purchase health insurance or pay a penalty, many are choosing to pay the penalty instead. In spite of heavy subsidies, the number of Americans insured under the ACA is millions short of the number projected.

The Congressional Budget Office (CBO) forecasted In February 2013 that 26 million Americans would be insured through the ACA by 2017. Instead, only 10 million Americans are insured through the ACA – in spite of government subsidies and penalties requiring enrollment.

Meanwhile, new research from the Health and Human Services Department shows that, on average, premiums in the individual market have more than doubled since 2013 in the 39 states where Obamacare exchanges are federally run.

In spite of sharply rising premiums, insurers are bailing on the ACA (aka Obamacare), because they are losing money on it. Blue CrossBlue Shield of Kansas City, for example, has just withdrawn its Obamacare plans for Kansas and Missouri, citing losses of $100 million. In many markets, Americans who use the federal exchanges to purchase insurance have only one insurer from which to purchase insurance. In some cases, insurers have withdrawn completely.

Given all of these problems – and others (remember the healthcare.gov website that didn’t work) – it’s no wonder that President Trump’s promise to replace the ACA is a major reason he was elected. As recently as November, only 42% of Americans polled by Gallup approved of the ACA and 53% disapproved.

Politics at Work

But consider what’s happened since November, when the Republican majority in Congress began working on a plan to replace Obamacare (Republicans have been seeking to replace the ACA since it was signed into law by President Obama on March 23, 2010, but without Republican control of Congress or the White House, it was not going to happen).

According to a Gallup poll in April, 55% of Americans now approve of the ACA and only 41% disapprove. Gallup has been polling Americans about the ACA since November 2012 and the recent poll marked the first time ever that a majority approved of the law.

Why now? What prompted the 13% swing, even as premiums increased by an average of 25% this year and the CEO of Aetna has said that Obamacare is in a “death spiral?”

CBO’s New Math

The ACA’s popularity is likely increasing, because Americans fear that without it, they, their neighbors or other people in need will lose their health insurance. That’s because of CBO estimates that claim millions of Americans will “lose” their health insurance if the Republican plan is enacted.

CBO is allegedly non-partisan, but it is, after all, a government agency and its estimates tend to favor government programs. The CBO initially estimated that the proposed Republican substitute, the American Health Care Act (AHCA), would result in 24 million Americans losing their health insurance coverage by 2026. With Congressional changes to the legislation, the CBO now says that 23 million Americans will lose their health insurance over the next decade.

It doesn’t take much analysis to recognize that the CBO figures are a lot of bunk. This is the same CBO, after all, that estimated 26 million Americans would be insured through Obamacare by now. Only 10 million are enrolled. A fourth grader could make a guess and not be off by a factor of 260%. How can we expect that CBO speculation about the AHCA will be any more accurate?

One flaw in CBO calculations that should be obvious is that if only 10 million Americans have enrolled through the ACA, how will more than twice that number lose their insurance if you take it away and substitute another program?

One reason that insurance premiums are so high under the ACA is that insureds are required to purchase an expensive, comprehensive level of coverage. Under the Republican proposal, the CBO found that in states that waive Obamacare requirements, healthy people could enjoy “significantly lower premiums,” because they would no longer be paying for a level of coverage they neither want nor need.

So if millions of people have access to lower premiums, won’t more of them purchase health insurance?

Checking the Facts

Factcheck.org pointed out that the 24 million uninsured figure is misleading, but that hasn’t stopped politicians from making doomsday predictions, while headlines in media throughout the land have been proclaiming that 24 million Americans would lose health insurance coverage under the Republican plan.

Factcheck reported: “On May 5 on MSNBC’s ‘Morning Joe,’ Rep. Tim Ryan of Ohio said Republicans were ‘celebrating kicking 24 million people off of their health care.’ The day before, Rep. Steny Hoyer of Maryland said at a Democratic press conference: ‘And the bill that was originally introduced, and still exists, and passed the House today, will take 24 million people off the insurance rolls.’”

A major reason the CBO predicts that millions of Americans would lose their insurance under the Republican plan is that they would no longer be required to pay a penalty for not being insured. In other words, they would be uninsured by choice, not because they are being forced to go without coverage.

For 2017, the penalty for not purchasing insurance is the higher of the following:

  • $695 per adult and $347.50 per child under 18, up to a maximum of $2,085.
  • 5% of household income above the tax-filing threshold, capped at the national average premium for a bronze health plan sold through the marketplace.

Maybe rather than eliminating the penalty for not buying insurance, the Republican plan should quadruple it. That would be politically unpopular, but even if it were to happen, you likely wouldn’t see headlines saying, “Republican Bill Would Increase Insured Americans by Millions.”

Less Medicaid, Lower Deficit

Another reason for CBO’s estimate is that Republican legislation would phase out the ACA’s expansion of Medicaid. An estimated 5 million Americans who are expected to become eligible for Medicaid would not become eligible. They would not lose their free, government-funded healthcare coverage; they just wouldn’t become eligible for it.

In addition, factcheck.org noted that the GOP plan “cuts off enhanced federal funds for expanded eligibility for states that have not yet taken up the ACA option.” That is, states would no longer have an incentive to join the federal exchanges that are failing across the country.

In addition, The Wall Street Journal reported, “the American Health Care Act is a major fiscal dividend, cutting taxes by $992 billion, spending by $1.1 trillion and the deficit by $119 billion over 10 years.

As the U.S. Senate begins to prepare its own legislation to replace the ACA, it’s likely to be wary of the negative publicity and politicking that will take place if someone, somewhere claims that even a single person will lose his or her health insurance coverage.

But if Republicans fail to take action, two things are almost certain to happen: 1. The ACA will become unsustainable and 2. Bernie Sanders and other Democrats on the far left will seek to replace it with socialized healthcare (e.g., a “single-payer” system). Socialized healthcare would make the ACA look good.

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