Breaking Health Care Research: After One Year, the Effects of Obamacare Are Grim

Kathryn Nix /

17 June 2009 - Washington, DC - Senators on the Health, Education, Labor and Pensions (HELP) Committee begins mark-up consideration on the Kennedy Health Care bill. The bill which may cost over a trillion dollars is being debated by both sides of the Senate committee.

This week marks the first anniversary of Obamacare. In response, Heritage analyst Brian Blase has provided a one-year checkup on the provisions that are already in place and the effects Americans are experiencing as a result.

Obamacare’s more popular provisions were supposedly front-loaded, and liberals are taking full advantage of this in the ongoing attempt to build support for the unpopular law. This week, Health and Human Services Secretary Kathleen Sebelius testified before the Senate Finance Committee on how, in her opinion, Obamacare is already benefiting Americans.

But a closer look shows that her perception may be based more on wishful thinking than reality. Blase’s research highlights how many of the provisions of Obamacare are already impacting Americans in harmful ways.

According to Secretary Sebelius, new insurance regulations “give millions of Americans important new health insurance protections.” But though these new rules are advertised as “consumer protections,” they often do the opposite. Blase writes that “Obamacare has resulted in insurance companies exiting markets, thereby reducing consumer choice.”

Child-only policies provide a poignant example. Secretary Sebelius touted that under the new law, insurance companies would no longer be able to deny children because of pre-existing conditions. But the result of this provision has been that insurers in at least 34 states have stopped offering child-only policies altogether, reducing access to insurance for all children. Moreover, to counter the negative effects of Obamacare‚Äôs poorly executed “consumer protections,” HHS has awarded more than 1,000 waivers exempting people from the law’s annual limit requirements, since employees with limited-benefit health plans could otherwise lose coverage altogether.

Secretary Sebelius also claimed that a new program that subsidizes health coverage for early retirees is giving businesses “relief from soaring retiree health care costs and retains coverage for Americans 55 to 64 years of age.” But, as Blase points out, “the program appears to be mostly a bailout for public-sector and union health benefit programs for early retirees,” so really, “The evidence suggests that this program shifts the costs of paying for unsustainable promises made to public and private unionized labor onto taxpayers.”

Finally, Secretary Sebelius argued that Obamacare “holds insurers accountable and will help bring down premiums.” In fact, Blase writes,

“[M]andating certain benefits has raised the cost of providing insurance, and this higher cost has been passed on to policyholders in the form of higher premiums. For example, Regence BlueCross BlueShield of Oregon has attributed 3.4 percentage points of its 17.1 percent rate increase to Obamacare, while Celtic Insurance Company in Wisconsin and North Carolina has attributed 9 percentage points of its 18 percent rate increase to Obamacare.”

Though most of the major provisions of Obamacare do not go into effect until 2014, Americans are already experiencing its harmful effects. If the law is fully implemented, its negative impact will be even more far-reaching. To avoid further damage to the health care system and the economy, Obamacare must be repealed.

To read Blase’s full report, click here.