Just under 24 million Americans have purchased health coverage through the Affordable Care Act's exchanges for 2025, marking yet another year of record-high enrollment.
As in previous years, the Biden administration was quick to declare this surge in sign-ups a victory for patients. "Every American should have access to quality, affordable health care," said then-Health and Human Services Secretary Xavier Becerra in response to the news. "[A]nd thanks to the ACA, they do."
That claim doesn't square with the evidence.
Americans haven't enrolled in Obamacare exchange plans in record numbers because of the quality of the coverage.
By most measures, marketplace plans are substandard.
Instead, Americans are signing up for exchange plans because of lavish subsidies implemented by Democrats under the 2022 Inflation Reduction Act (IRA).
The enhanced exchange subsidies, passed as part of the 2022 Inflation Reduction Act, came in response to a very real problem — namely, the soaring price of exchange plans.
In 2019, average monthly premiums for individual coverage reached $558. That's more than double the $244 a month average for coverage in 2013, the year before the ACA marketplaces came online.
This dramatic premium inflation was the direct result of mandates and rules imposed by Obamacare, including its prohibition on denying coverage based on a patient's health status or history and its limits on charging older patients any more than three times what they charge younger ones.
Rather than roll back these costly regulations, Democrats threw money at the problem. Under the enhanced subsidies, no American has to devote more than 8.5% of income toward premiums.
That percentage declines as income declines.
People earning between 100% and 150% of the federal poverty level enjoy premium-free coverage.
We should not be surprised that people will sign up for coverage if the government pays them to do so.
Unfortunately, that coverage tends to be of low quality.
Marketplace plans generally come with hefty deductibles — the amount of money a person must spend out of pocket before their coverage kicks in.
In 2024, the average deductible for an individual mid-level silver plan was more than $5,200. Bronze plans that featured lower premiums had an average individual deductible of more than $7,200.
At the same time, exchange plans typically confine beneficiaries to narrow provider networks. So they may have trouble finding a doctor who will accept their insurance — or who can see them in a timely fashion.
A March 2024 analysis from Oliver Wyman found that nearly eight in ten exchange plans had narrow networks.
According to a recent analysis by the Kaiser Family Foundation, the average exchange enrollee had access to just 40% of practicing doctors in their area in 2021.
Nevertheless, Democrats continue to tout Obamacare's high enrollment figures as an achievement. High enrollment is certainly good for insurers. Federal premium subsidies boost their profits — particularly if their beneficiaries can't put their coverage to use because they can't find a provider or fail to hit their annual deductible.
Access to coverage is not the same thing as access to care — as many exchange enrollees know all too well.
In fact, spending billions to drive up the number of people with insurance may just be a waste of taxpayer resources.
A recent paper by the Paragon Health Institute looked at a range of randomized controlled studies regarding health insurance and actual health — and found that "insurance produces little, if any, health benefits."
When the enhanced exchange subsidies expire at the end of this year, few should be sad to see them go. Indeed, the demise of this misguided policy could finally set the stage for substantive reforms that can genuinely lower the cost of health insurance --- and improve its quality.
The Biden administration wasted billions of taxpayer dollars paying patients to sign up for low-quality, overpriced health plans.
They hardly deserve applause for this gross mismanagement of public funds.
Sally C. Pipes is president, CEO, and the 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 Books 2020). Follow her on Twitter @sallypipes. Read Sally Pipes' Reports — More Here.
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