At this week’s vice presidential debate, Democratic nominee Minnesota Gov. Tim Walz said his running mate, Vice President Kamala Harris, “will protect and enhance” the Affordable Care Act.
That’s supposed to be reassuring? Thanks to the Affordable Care Act, premiums and deductibles have surged even as the quality of coverage available on the individual market has declined precipitously.
Obamacare’s exchanges opened for business on Jan. 1, 2014. The year prior, before Obamacare’s many regulations took effect, the average monthly individual market premium was $244. This year, the average monthly premium for an individual mid-level silver benchmark plan was $477.
In some cases, premiums are much higher. According to the Paragon Health Institute’s Brian Blase, annual premiums for a mid-level plan for a 60-year-old couple in Morgantown, West Virginia, could exceed $42,000. Annual premiums for that same couple in Prescott, Arizona, would run nearly $33,000.
Deductibles have risen, too. The average deductible for a basic bronze-tier marketplace plan, which covers 60% of a beneficiary’s claims costs on average, is $7,258 this year. That’s over $2,000 higher than the average deductible for a similar plan in 2014.
Higher premiums and deductibles don’t buy better-quality coverage. It’s just the opposite. The share of individual market consumers enrolled in plans with broad provider networks declined from 36% in 2014 to just 11% by 2023.
Exchange enrollees may not know their premiums are rising because Democrats are largely covering them with generous federal subsidies. The Inflation Reduction Act capped premiums for people making more than four times the federal poverty level, nearly $125,000 for a family of four, at 8.5% of income. The law also ratcheted down the share of income that people who make less than four times the poverty level have to devote to health insurance.
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The bill for that largesse will eventually come due for taxpayers. The IRA will have spent $64 billion on these enhanced subsidies over three years when they expire at the end of 2025. If Democrats extend them permanently as they have proposed, the estimated cost over 10 years will be $383 billion.
The Affordable Care Act has failed to make health insurance more affordable. Democrats’ only idea for protecting and enhancing the law is to spend billions more taxpayer dollars on it. We’ve tried that for a decade without success. It’s time for a different approach: one that empowers doctors and patients, not the federal government.
Sally C. Pipes is president, CEO, and Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All (Encounter 2020). Follow her on X @sallypipes.