A woman looks at the HealthCare.gov insurance exchange Internet site in Washington in 2013. (Karen Bleier/Agence France-Presse via Getty Images)
Historian David Maraniss notes, in Sunday’s Post, that President Obama came to office with the goal of changing “the trajectory of America” and leaving “a legacy as a president of consequence, the liberal counter to [Ronald] Reagan.”
On the foreign-policy front, he is the anti-Reagan for certain. Reagan defeated Soviet communism and left us a safer world; Obama presided over the rise and metastasis of the Islamic State and left us a far more dangerous one.
Domestically, Ronald Reagan told the American people: “The nine most terrifying words in the English language are ‘I’m from the government, and I’m here to help.’ ” Obama wanted to convince Americans that they were not terrifying. And the way he was going to do it was through the only great liberal legislative achievement of his presidency: Obamacare.
He failed. Even before he leaves office, Obamacare has begun unraveling.
The law was passed over the objections of a majority of Americans, it is still opposed by a majority of Americans — and their opposition has been vindicated. Last week,UnitedHealth Group announced that, after estimated losses of more than $1 billion for 2015 and 2016 under Obamacare, the company was pulling out of most of its ill-fated exchanges.
Speaking during an appearance at SXSW, President Obama discussed the many problems that occurred during the rollout of the Affordable Care Act’s website, HealthCare.gov. (Reuters)
In fact, commercial insurers across the country are hemorrhaging money on Obamacare at alarming rates. Health Care Service Corp. (which owns Blue Cross and Blue Shield affiliates in Illinois, Montana, New Mexico, Oklahoma and Texas) has lost “well north of $2 billion” in its first two years — twice as much as UnitedHealth. Highmark, the nation’s fourth-largest Blue Cross plan, lost nearly $600 million in 2015. Blue Cross and Blue Shield of North Carolina has projected it will lose more than $400 million in the first two years, and the company has said it may leave the exchanges entirely next year.
The president promised these insurers taxpayer bailouts if they lost money, but Congress in its wisdom passed legislation barring the use of taxpayer dollars to prop up the insurers. Without the bailouts, commercial insurers are being forced to eat their losses — while more than half of the Obamacare nonprofit insurance cooperatives created under the law failed.
So what happens now? Because commercial insurers are not going to keep bleeding cash to prop up Obamacare, they have three choices: 1) scale back coverage, 2) raise prices or 3) get out of the exchanges entirely. More and more are going to choose option 3.
Does this mean that Obamacare is finally entering its “death spiral”? Not exactly. As my American Enterprise Institute colleague Scott Gottlieb explains, while commercial insurers are starting to leave Obamacare, they are being replaced by Medicaid health maintenance organizations (HMOs) offering skimpy plans that mirror what they offer in Medicaid — our nation’s emergency health insurance program for the poorest of the poor.
This is a catastrophe for people stuck in Obamacare. According to a 2014 McKinsey survey, about three-quarters of those in the exchanges were previously insured on commercial plans, either through their employers or the individual market. They were doing fine without taxpayer-subsidized insurance but were pushed into Obamacare. They now face rising premiums and smaller provider networks — and as commercial insurers flee, they will increasingly be stuck in horrible, Medicaid-style plans.
This is not what the president promised when he sold Obamacare to the American people.
The president promised Obamacare would provide “more choice, more competition, lower costs.” Instead, Americans have less choice, less competition and higher costs. According to the Kaiser Family Foundation, if UnitedHealth “were to leave the exchange market overall, 1.8 million Marketplace enrollees would be left with two insurers, and another 1.1 million would be left with one insurer.” As more commercial insurers do the same, there will be even less competition — and higher premiums.
The president promised “if you like your doctor, you can keep your doctor.” But commercial insurers who stay in Obamacare are responding to massive losses by narrowing provider networks, with fewer doctors and hospitals to choose from. And those that quit are being replaced by Medicaid HMOs with even less doctor choice.
The president promised Obamacare would “lower premiums by up to $2,500 for a typical family per year.” But insurers are raising premiums instead to cover the massive losses, and even Marilyn Tavenner — the former Obama administration official who ran Obamacare — has predicted premiums will rise even further next year.
As they do, young, healthy individuals will be priced out of the exchanges — and the only people who will be able to afford Obamacare will be high-risk patients who qualify for federal subsidies. Without enough healthy people in the exchanges to pay for the sick ones, taxpayers will be stuck with more and more of the costs over time — a situation that is unsustainable in the long run.
With Obamacare, Obama wanted to restore America’s faith in big government. Instead, the opposite has happened. Today, 69 percent of Americans say big government is “the biggest threat to the country in the future” (ahead of big business or big labor). That figure, which is slightly down from 72 percent in 2013, is higher under Obama than it has been since Gallup began asking the question about 50 years ago. Obamacare has done more to discredit big government than 1,000 Reagan speeches ever did.
That, in the end, will be Obama’s enduring domestic legacy.
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Abraham Lincoln once said, “No country can sustain, in idleness, more than a small percentage of its numbers. The great majority must labor at something productive.”
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