Health insurance is becoming unaffordable for the middle class

Betsy McCaughey  ·  Sep 28, 2017

Editor’s Note: We are publishing this article to encourage you to tell friends who are experiencing loss of health insurance plans or unaffordable rate increases about Samaritan’s non-insurance health care sharing option

Samaritan is nonpartisan. We agree with the author that regulation is the primary problem, no matter which part of the economy it targets, no matter which political party proposes it.

Brace yourself for the next health insurance crisis: the uninsured middle class. The Affordable Care Act added millions of mostly poor people to the insurance rolls. But the law is driving premiums so high that middle-class people can no longer afford insurance. Several million are expected to drop coverage in 2018.

After Republicans reneged on the promise to repeal and replace ObamaCare, Senators Patty Murray, D-Wash., and Lamar Alexander, R-Tenn., swooped in with another plan to keep the floundering health law afloat. The senators cloak themselves in the mantle of bipartisan reasonableness, but don’t be fooled. There’s nothing reasonable about their proposal. The big losers are middle-class buyers priced out of the individual insurance market and taxpayers footing the bill for the billions in extra spending these fixers are proposing.

The winners are insurance companies.

Insurers are demanding another $8 billion this year in taxpayer funds to compensate them for giving breaks on deductibles and copays to low-income customers. A federal court ruled insurers aren’t entitled to the money, but funds have been diverted to them anyway. Meanwhile, the insurers have been dropping many plans and leaving entire states, and now they are threatening to drop even more plans if they don’t get the latest round of bailouts. The Senate’s fixers are only too willing to cave.

Murray has already laid down the ground rules, demanding that any “fix” can’t change the Affordable Care Act’s one-size-fits-all coverage requirement. That continues to force single men to pay for maternity coverage and childless couples to pay for pediatric dental care. Murray also forbids changing the ACA regulation that makes the healthy pay the same premiums as people with pre-existing conditions—community pricing. She’s barring the very changes needed to lower premiums.

Also backing the $8 billion payout to insurers is a group of more than 40 Republican and Democratic House members who call themselves the Problem Solvers Caucus. Trouble is, the regulations are the problem, and they’re proposing more of the same.

The ACA is actually two boondoggles glued together: a vast Medicaid expansion to cover the poor and a federal takeover of individual insurance markets, previously regulated by states. Since that takeover, individual premiums have more than doubled, and they’re predicted to rise another 25 to 35 percent next year. The mandatory benefit package and community pricing regulations makes these plans unsustainable, according to actuarial experts. Premiums will never go down until regulations are repealed. That would liberate the middle class to buy affordable insurance without hurting the poor on Medicaid.

The law’s defenders insist premium hikes are not a problem because whenever premiums go up, so do subsidies for low-income buyers. They pay the same year after year, regardless of how premiums soar.

These apologists never mention buyers who don’t qualify for subsidies. No compassion for them.

Not to mention the 6.9 million people who buy coverage outside the ACA exchanges, where there are no subsidies. In 2017, the average premium for a family of four buying on eHealth reached $14,300 with a whopping $8,322 deductible. That means shelling out more than $22,600 before seeing a penny from insurance. You can pay your mortgage for that.

In 2018, many buyers will conclude they can’t afford insurance, because it would consume up to a quarter of their pre-tax income, according to University of Houston health law professor Seth Chandler.

Those defending the status quo are also ignoring who pays for these ever-rising subsidies: taxpayers. And taxpayers are hurting. In 2016, the average household paid 41 percent more taxes than just three years earlier. Any proposal that merely tweaks regulations instead of rolling them back won’t address the impact of soaring premiums on taxpayers, and is no “fix.”

Expect a lot of self-promoting bipartisanship from the politicians but no real help for middle-class insurance buyers and taxpayers, the forgotten victims of ObamaCare.

Betsy McCaughey ( a constitutional scholar with a Ph.D. from Columbia University, and former Lt. governor of New York.

McCaughey founded the Committee to Reduce Infection Deaths (also known as RID), a nationwide educational campaign to stop hospital-acquired infections. RID has won legislation in over 34 states for public reporting of infection rates.