It has been two years since Obamacare was signed into law, and although the major provisions don’t begin until 2014, some have already been implemented. The parts of the law already in effect were thought by its proponents to be its most popular, but as detailed in Heritage’s “The Obamacare Two-Year Checkup: More Reasons for Repeal,” the law is already proving ineffective in some cases and harmful in others. Here are some of the biggest failures of Obamacare highlighted by the paper:
- The disappearance of child-only policies. Obamacare requires insurers who sell child-only plans to accept all applicants regardless of health condition. This allows parents to wait until their children are sick to enroll them in health plans. Two years later, one survey found that “17 states indicated that no insurers were selling child-only policies to new enrollees, and 39 states responded that at least one insurer exited the child-only market since the new law took effect.”
- “Free” preventive services cost Americans. Obamacare requires coverage of certain preventive services with no cost-sharing for the individual. Two years later, the list includes abortion-inducing drugs, sterilization, and other contraceptives as mandated coverage—even for many religious organizations. Heritage analysts report, “This created an outcry from members of many faiths who feel this decision is an attack on religious freedom and their ability to serve communities across the country.”
- A failing small business tax credit. Obamacare provides a temporary tax credit to small employers as an incentive for them to offer health insurance to their employees. Two years later, the IRS reports that only 7 percent of the originally estimated 4.4 million eligible small businesses have claimed the credit.
- A broke program for early retirees. Obamacare established a temporary reinsurance program from May 2010 to January 2014 to pay a portion of companies’ costs to insure early retirees between the ages of 55 and 65. Two years later, the program ran out of money almost three years early and is no longer accepting additional applications. As Heritage analysts explain, the program “clearly shifts the costs of paying for unsustainable promises made to public and private employees to federal taxpayers and further underscores how the true cost of implementing the health care law exceeds original estimates.”
- Low enrollment in high-risk pools. Obamacare creates high-risk pools for individuals with pre-existing conditions who have been uninsured for at least six months to purchase insurance. Two years later, using the Administration’s own numbers, enrollment in the high-risk pools remains low: only 13 percent of initial estimates. Heritage analysts point out, “At the same time, medical-claims costs have been 2.5 times higher than initially projected, and the high-risk pools may still exhaust or exceed the available funding, even though they serve such a small portion of those they were intended to help.”
- A damaging medical loss ratio (MLR). Obamacare requires insurers to spend 80 percent (85 percent for large group plans) of premium revenue on medical claims or quality improvement. Two years later, Heritage analysts point out, “Seventeen states applied for the MLR waivers, arguing that the regulations would destabilize their markets.” The Administration has granted a full waiver to only one state; six received a partial waiver, and 10 requests were rejected. Some insurers have already left the market because of the requirement, and the strict medical loss ratio threatens the existence of health savings accounts, which are used by 11 million Americans.
- An unsustainable new entitlement. Obamacare created the CLASS Act, a government-run long-term care insurance program. Two years later, the Administration has declared the CLASS program unsustainable and halted its implementation. Heritage analysts report, “On February 1, 2012, the House of Representatives voted 267 (including 28 Democrats) to 159 to repeal the troubled CLASS program, and it now awaits consideration by the U.S. Senate.”
To read about all of the consequences of Obamacare chronicled in “The Obamacare Two-Year Checkup: More Reasons for Repeal,” click here.