The ‘Affordable’ Care Act, another Christmas bah-humbug

Getty Images

‘Tis the season for giving—and for the Affordable Care Act, it’s become the season for giving bad news. For the third year in a row, open enrollment has given millions of hardworking Americans news that their health insurance will have higher premiums, fewer choices, and more out-of-pocket costs—if their insurance will even exist after the holidays are over. 

But this sad reality won’t be found in the flowery rhetoric of the law’s supporters. From President Obama to Hillary ClintonHillary Rodham ClintonAdvocates release parody video to push for paid leave laws Poll: Clinton outpacing Trump with millennials WATCH LIVE: Clinton campaigns in Florida on her birthday MORE to many candidates for both the U.S. Senate and House, politicians are claiming the law is a smashing success. This might make for a good stump speech for the base, but these claims carry huge political risks: They sound woefully disconnected from the struggles millions of Americans are suffering under this law. 

Those struggles are both economic and social. According to consulting firm McKinsey & Company, the median premium increase for the lowest-cost plans will range between 10 and 13 percent across all tiers next year—bronze, silver, gold, and platinum. That’s up from and on top of this year’s 7 to 10 percent increases. Premiums are projected to continue rising in the years ahead. 

The picture is even grimmer in many states that will drive the national discussion in 2016. In North Carolina, over 600,000 are facing premium spikes of at least 20 percent. Similarly, more than 150,000 Pennsylvanians are staring at 20-plus percent increases for next year. And in Colorado—where 80,000 had their policies cancelled due to the state’s failed co-op—the exchange’s 172,000 members are facing average premium increases of 18.7 percent. 

The law's advocates claim that premiums are only half the story. That it’s not a big deal because subsidies cover much of the cost for lower-income families and individuals. 

Yet this spin falls flat for millions who are facing sky-high deductibles, which the subsidies don’t cover. Average deductibles this year for individual and family silver plans are $2,927 and $6,010, respectively. Those for “lower cost” bronze plans are even higher—$5,181 and $10,545. Compare that to the average deductibles for employer-provided health insurance of $1,077, and this much becomes clear: Affordable Care Act plans are a rotten deal. 

That’s especially true for the 62 percent of Americans who are living paycheck to paycheck. They’ll find little comfort in having a health insurance plan with such high out-of-pocket costs. The New York Times recently summed it up best: Such high-cost deductibles render these plans “all but useless” for many who are forced to buy them. 

But it’s not just the Affordable Care Act’s economic costs that are crushing millions of Americans—it’s also the annual disruption it causes in people’s lives. 

In many cases, the only way to avoid double-digit premium increases—for those who can at all—is to continuously switch plans year after year. New doctors. New rules. New restrictions. The anxiety this places on people’s lives is immeasurable. As one Oregon consumer put it, “Every year I feel like I’m starting all over again, and I just dread it.” 

For far too many, starting all over again is their only option. This owes to the millions of cancellations that have occurred in each of the law’s first three years. In fall 2013, it was mostly individual policies that were hit—with at least 4.7 million Americans receiving cancellation notices. Last fall, it was small group employer plans that took the biggest hit. And now this year, the failure of 12 of the law’s 23 co-ops—which were established to lower prices—has left over 750,000 more people scrambling to find new policies. 

Which is easier said than done, given the fewer available options in 2016. McKinsey also found that 40 percent of consumers will find fewer choices in their counties next year, while only 16 percent will find more. This trend shows no sign of abating. UnitedHealth, the law’s largest insurer with 550,000 enrollees on the state and federal exchanges, recently announced it may not participate in the exchanges after next year. The law is as unaffordable for the company as it is for the Americans it’s supposed to help. 

These are the realities under the president’s signature legislative accomplishment: higher premiums, higher costs, fewer choices, and millions of lives disrupted every year. The politicians who claim the law is working may want to talk to the Americans who are suffering from it. If they keep spinning the Affordable Care Act as an unmitigated success, it may prove an unmitigated disaster for them come November 8, 2016.

Davis is executive vice president for marketing and communications at Freedom Partners Chamber of Commerce.