The truth behind ObamaCare numbers
As a presidential candidate, Barack Obama promised that his health reform plan would “lower premiums by up to $2,500 for a typical family.” So it’s not surprising that many people are dismayed by the rising costs under the health reform law he signed.
But the president and lawmakers who created ObamaCare were always more focused on increasing coverage than on reducing costs. That’s why two of the law’s central provisions were expanding Medicaid eligibility and creating new government-run exchanges offering subsidized health plans.
So, how much did ObamaCare increase health insurance coverage?
The latest enrollment data for Medicaid and private plans show that the number of Americans with coverage increased by 8.5 million during the first half of 2014. However, 6.1 million of that number were new Medicaid enrollees. In other words, 71 percent of the total coverage gain came from ObamaCare expanding Medicaid to able-bodied, working-age adults.
Digging further into the private market data, we find that the number of people covered by individual-market plans increased by 6.2 million but that the number of those with employer-group coverage declined by 3.8 million. Thus, the drop in employment-based coverage offset 61 percent of the growth in individual-market coverage, resulting in a net increase in private coverage of only about 2.4 million.
Half the states had ObamaCare Medicaid expansion in effect during the first six months of 2014, and those states accounted for 94 percent of the 6.1 million individuals added to the Medicaid rolls during the period. States that did not adopt the expansion collectively added only 355,000 people to Medicaid, reflecting modest growth in the populations traditionally covered by Medicaid — poor children, low-income pregnant women and disabled adults.
Of those who obtained coverage through the ObamaCare exchanges, no more than 2.4 million were previously uninsured. The rest of the ObamaCare exchange enrollments appear to have resulted from a substitution effect — meaning enrollment in new exchange plans by people who previously had coverage through either an individual-market or employer-group plan.
These data tell us two basic things about ObamaCare’s performance. First, when it comes to covering the uninsured, ObamaCare is so far mainly an expansion of Medicaid. Second, the new government exchanges didn’t enroll many people who were previously uninsured.
The problem with ObamaCare mainly being a Medicaid expansion is that the new Medicaid enrollees are not the vulnerable poor the program was designed to serve. Rather, they are able-bodied, working-age adults who have low incomes because they are either unemployed or under-employed.
Furthermore, 82 percent of the adults who qualify for the ObamaCare Medicaid expansion don’t even have dependent children. Giving those individuals Medicaid doesn’t provide them with what they need most: gainful employment. Indeed, as the Congressional Budget Office has noted, expanding Medicaid to that population will discourage many of them from taking a job or working more hours if doing so means losing Medicaid coverage.
With respect to the new exchanges, the majority of enrollees apparently were people who already had coverage. It is also likely that many of them had to get new coverage because ObamaCare forced their insurer or employer to discontinue their old plan.
That’s not exactly “if you like your plan, you can keep it.”
Ed Haislmaier is a senior research fellow in the Center for Health Policy Studies at The Heritage Foundation (heritage.org).