“Obamacare is in a death spiral. Premiums have increased drastically, insurers are abandoning the marketplace, and the system is collapsing under its own weight.”
Let’s examine these claims.
“Premiums have increased drastically”
Two weeks ago it was reported that Obamacare premiums will go up 3.6% next year.
This analysis came from looking at 47 states, and it was determined that we won’t be seeing the 30% average increases in 2019 that we saw this year.
In fact, 11 states will see premiums drop, while 6 states are set to see premiums go up by 10% to 18%.
Montana will see average premium increases of 6%.
But this is deceiving…and this is where Rosendale gets to the truth a bit.
We know that in 2019 prices will go up by 6%...but…
- In 2018, premium prices went up by 18.7%
- In 2017 they went up 55.3%
- In 2016 they went up 34.5%
So over the last three years we’ve seen health insurance premiums in Montana go up by 108.5%.
Next year, we can say that health insurance premiums in Montana went up by nearly 115% since Obamacare took place.
I would indeed call those increases drastic.
“Insurers are abandoning the marketplace”
In addition to some states lowering premiums, 19 states will actually have more insurers enter their marketplace.
Here in Montana we have just three choices, as we have had for some time. No insurers left the Montana marketplace in either 2016 or 2017.
Rosendale’s claim that insurers are leaving the market may have been right a year or two ago, but seems wrong now.
So what are those three choices doing with their rates next year?
- Blue Cross and Blue Shield of Montana doesn’t plan on increasing the rates for their 18,500 Obamacare customers at all, and will actually lower premiums by 4.2% for the 25,000 people on their small group plans (or small business health plans).
- PacificSource will increase rates by 6.0% for their 12,400 Obamacare customers, and 1.8% for the 19,300 people enrolled in their small group plans.
- The Montana Health CO-OP will increase rates by 10.3% for their 22,700 Obamacare customers, and 4.7% for the 250 people in their small group plans.
Montanans enrolling in Obamacare can choose between 64 different plans offered by those three companies.
If Montanans aren’t going to get the subsidy and want a cheaper premium option, they’ll have that from two companies offering off-exchange plans: UnitedHealthcare and WMI. Those two companies will over 30 different small group plans.
On average, Montana Obamacare premiums are set to go up by 6%, with silver plan holders hit the hardest.
“the system is collapsing under its own weight”
We know that 47,699 people enrolled in an Obamacare plan in Montana this year.
- That’s a 9% drop from 2017, when 52,473 people enrolled.
- It’s also 18% less than the 58,000 people enrolled in 2016.
So in effect, over the past two years we’ve seen 10,000 people drop out of the Obamacare marketplace.
Still, we know that we have around 45,000 people enrolled in small group plans, and who knows how many will enroll in the new, non-Obamacare plan option.
When it comes to the latter, we know the price was around $124 a month compared to the Obamacare plans’ $393 a month.
When you’re not getting a subsidy, that’s a big change in how much you pay each month.
Because of that, I suspect a lot of people not getting subsidies will choose these non-Obamacare plans, and we’ll see a further drop in those covered by Obamacare, both nationally and in Montana.
For now, however, I don’t really see the system collapsing under its own weight…but I do see a lot of well-off individuals pissed that they have to pay so much more for the exact same thing.
“Obamacare is in a death spiral”
This might be the area where Rosendale is most correct.
When you look at the numbers, you can tell the system just isn’t sustainable.
For instance, the average pre-subsidy premium for a Montana Obamacare plan is $581 a month.
That’s $105 more than the annual Obamacare premium of $476 a month.
But these numbers are deceiving.
A whopping 84% of Montanans received some kind of subsidy in 2017, meaning their Obamacare premium was, on average, just $176 a month.
That’s great for all the lower-income people in Montana, but it’s hurting the people that don’t qualify as low-income.
For those people, they see premiums going up and no one is helping them pay it.
This is especially bad for all those folks that had pre-Obamacare plans…plans that were typically hundreds of dollars less a month.
For that reason, I do feel that Rosendale is correct and that Obamacare is in a death spiral.
In Montana, our situation is even worse as the feds will no longer give us all that subsidy money, and we have to come up with it ourselves…and at a time when the state is piss-broke.
One idea is to tax tobacco more, but this would still leave the state short by anywhere from $28 million to $51 million.
The logical option would be to switch to a Single Payer system nationally, and pay for it with serious cuts and pullbacks to our defense budget and vast overseas empire of military bases and then give those savings to the states.
Sadly, the corporate politicians in control of both major parties will label you as ‘against the troops,’ and the media will do the same.
The reason is simple – defense contractors made $375 billion in 2016. To keep making that the contractors flip some of those profits to politicians so the politicians will keep allocating the money to them.
This at a time when our healthcare system for veterans is in even worse shape than Obamacare.
The enrollment period to get a 2019 Obamacare plan runs from just November 1 to December 15.
If having healthcare was so important, you’d think our government would allow you to sign up for it all year long.
But they only give you 45 days.
Obamacare premiums are going up all over the country, with the smallest increases happening in Richmond, Virginia (7%) and the largest in Baltimore, Maryland (36%).
The largest increase here in Montana is 10.3%, with the average of the three insurers being 6%.
The biggest reason listed for the huge increases this year is the “repeal of the individual mandate penalty in the Republican tax law,” as well as Trump’s “expansion of non-Obamacare plans” and the end to “cost-sharing reduction payments to insurers.”
Now, if you get a government subsidy because you don’t make a lot of money, there’s not much to worry about.
You won’t see much in the way of premium increases as the Obamacare law ensures your subsidy will increase if your premium does.
But what if you don’t get a subsidy?
Then you’re up shit creek.
The subsidy rule is that you have to make less than:
- $48,000 a year if you’re single
- $65,000 a year if you’re married
- $90,000 a year if you have a family of four.
Most families making more than that will probably end up paying about $2,000 more in premiums in 2019 than they did this year.
Trump recently expanded health insurance options by allowing people to get a non-Obamacare plan.
Still, those aren’t subsidized and we know that between 2017 and 2018, a total of 2.3 million people either dropped health insurance entirely or got back into the Obamacare marketplace because they wanted/needed those subsidies.
I think there’s a lot of truth to Rosendale’s statements on Obamacare…but a lot more frustration.
He’s frustrated with healthcare in America, as are millions of other people.
Even people on Obamacare and getting a huge subsidy aren’t that happy – it still often costs too much.
For people that have done everything right in this country – went to college, got the good job, started the family and bought the house – they typically don’t qualify for subsidies and have seen a huge percentage of their disposable income eaten up by healthcare premiums and deductibles.
This is money they can’t spend at the movies or at restaurants or buying a big new TV or a huge truck.
I haven’t seen studies on how much money American consumers weren’t able to spend on retail items since Obamacare took place, but I bet it’s in the billions of dollars.
What’s especially sad is that both Democrats and Republicans know the current system isn’t working.
Neither seems to know what to do about it, though.
And with Big Insurance continuing to give them campaign cash, I doubt Democrats or Republicans will want to do anything about it.
Dorsey, Jenifer. “Health Insurance Alternatives to Obamacare.” Health E Deals. 6 September 2018. https://www.healthedeals.com/blog/save/obamacare-health-insurance-alternatives/
Norris, Louise. “Montana health insurance marketplace: history and news of the state’s exchange.” HealthInsurance.org. 29 June 2018. https://www.healthinsurance.org/montana-state-health-insurance-exchange/
“Obamacare 2019 Health Insurance Rates Finalized.” Montana CSI. 10 August 2018. https://csimt.gov/news/obamacare-2019-health-insurance-rates-finalized/
“Proposed 2019 Individual and Small Group Health Insurance Rates Released to the Public.” Montana CSI. 28 June 2018. https://csimt.gov/news/proposed-2019-individual-and-small-group-health-insurance-rates-released-to-the-public/
Scott, Dylan. “Obamacare premiums are going to go up in 2019. Here’s what you should know.” Vox. 15 June 2018. https://www.vox.com/policy-and-politics/2018/6/15/17468478/voxcare-obamacare-premiums-rising-2019
Stebbins, Sam. “20 companies profiting the most from war.” MSN. 3 March 2018. https://www.msn.com/en-us/money/companies/20-companies-profiting-the-most-from-war/ss-BBJntl6
Sullivan, Peter. “ObamaCare premiums to rise just 3.6 percent next year, sign of stability: study.” The Hill. 7 September 2018. https://thehill.com/policy/healthcare/405516-obamacare-premiums-to-rise-modest-38-percent-next-year-study