Today marks the one-year anniversary of Obamacare. While advocates spend the week highlighting the new law’s effects on different groups of Americans, we are doing the same. A review of the facts on the ground and the conclusions of Heritage research over the past year reveals the far-reaching negative consequences.
Today, the focus is on the “consumer protections” included in Obamacare. To be sure, some Americans will benefit from these changes, but, as Heritage analyst Brian Blase explains, the overall result is that:
“Obamacare has increased government control of Americans’ health care choices, raised the cost of insurance, forced insurers to stop offering child-only policies, broken the promise that an individual can keep his insurance unaltered, and bailed out underfunded union early-retiree health care plans. The early results suggest that Obamacare’s ‘benefits’ are not worth their costs.”
Let’s take a look at several of the “benefits” the law was supposed to bring and their consequences:
Good intentions reduce options for children. One “benefit” is a requirement that insurance companies accept all new applicants for child-only health plans, regardless of pre-existing conditions. According to the White House, this would “help children (and eventually all Americans) with pre-existing conditions gain coverage and keep it.” But under the new law, the opposite has actually occurred in several states. According to a survey conducted by Senate Republican Health, Education, Labor, and Pensions (HELP) committee staff, 20 states no longer have insurance companies that offer child-only policies at all. And as Politico reported, “Health insurers in 34 states have stopped selling child-only insurance policies as a result of the health reform law, and the market continues to destabilize.”
Without waivers, insurance rules would increase uninsurance. Obamacare prohibits health plans from placing lifetime or annual limits on benefits. But several employers offer “mini-med” policies with caps included to make them affordable. Blase writes that “employees would likely lose coverage if the plans were subject to the annual limit requirement.” To prevent increasing the number of uninsured as a result of these poorly thought out policies, the Department of Health and Human Services (HHS) has issued more than 1,000 waivers affecting nearly 2.4 million employees.
Heavy regulation companies cuts consumer options. Also included in Obamacare’s “consumer protections” is a requirement that insurers use a specified percentage of collected premiums for medical expenses, as opposed to administrative costs. What qualifies as a medical or administrative expense was ultimately determined by HHS, guided by the National Association of Insurance Commissioners. The result of this requirement has been that smaller insurers have been forced to exit the market, reducing consumer choice.
Preventive care mandates raise premiums. Finally, Obamacare requires health plans to cover all preventive services rated A or B by the U.S. Preventive Services Task Force. Plans must also cover recommended immunizations with no cost-sharing. Blase writes that, after one year, “HHS has not yet clarified the preventive care regulations, and this has produced additional uncertainty in health insurance markets.” He adds, “the mandate requiring insurance companies to pay for preventive services with no cost-sharing has increased premiums while reducing consumer opportunity to select from a variety of plans, including ones with various degrees of cost-sharing.”
Obamacare goes about insurance market reform in the wrong way. The unfortunate consequences of this will be reduced access, limited consumer choice, less competition among insurers, and higher premiums. To read more about the impact of the changes already made by Obamacare, check out Blase’s full report here.