health insurance marketplace
Employee Benefits

When the Truth Isn’t Politically Convenient

Den Bishop
Den Bishop
Senior Advisor

Obamacare Costs Increase 30.5% in 2018

Obamacare Costs Skyrocket 43.6% in 2018

Obamacare Costs Drop 19.1% in 2018

The preceding three headlines are all TRUE based on data released by the Centers for Medicare and Medicaid Services (CMS) regarding final costs and enrollment in the Health Insurance Marketplace (aka Exchange or Obamacare) for 2018. The Affordable Care Act (ACA) created a subsidized system of winners and losers. When you hear anything about healthcare costs going up or down, you must now ask yourself “for whom?” Here’s how the headlines are all true.

  • Premiums collected by insurance companies increased 30.5 percent per person over 2017. Many people switched to lower-cost plans or networks, but the net result was a 30.5 percent increase in the amount paid to insurance companies for coverage. Part of this increase was fueled by uncertainty around government funding of Cost Sharing Reduction (CSR) payments. The CSR program allows individuals to receive plans with lower deductibles, copays, and out-of-pocket limits while paying for a less rich plan. I know…it sounds crazy, but this is actually part of the ACA.
  • 85 percent of the people who buy insurance through the Marketplace receive a subsidy, and the average subsidy now covers 85 percent of the premium. The increase in premiums charged by insurance companies resulted in a leveraged increase in the subsidies funded by taxpayers. The average subsidy increased 43.6 percent in 2018.
  • The higher subsidies actually decreased the amount the average subsidized participant pays for insurance on a monthly basis in 2018. The net result is a 19.1 percent decrease in the net cost of insurance for subsidized participants in 2018. Yes, subsidized participants have seen their healthcare cost go down!

I’m guessing this is the first time you have heard this news. So why aren’t politicians or politically charged media outlets talking about this data? Left-leaning politicians and media don’t want to give Republicans credit for lowering the cost of insurance for Obamacare participants. Right-leaning politicians and media don’t want to admit they increased the economic burden on taxpayers and actually supported Obamacare participants.

The end result is the truth inside the numbers isn’t convenient for either political side. Therefore, this isn’t fake news. It simply does not make the news at all.

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