18 Jun 2014 New Health and Human Services Report Shows ObamaCare Exchanges Enrollees Likely Have More Health Problems than Average
This Likely Means Exchanges are Headed for a Death Spiral, Says National Center Analyst
Exchanges Also Have Increased Premiums and Reduced Choice
Washington, D.C. – “A new report from the Department of Health and Human Services shows that the ObamaCare exchanges are likely attracting customers with greater than average medical problems,” said Dr. David Hogberg, health care policy analyst at the National Center for Public Policy Research. “That means that the exchanges are likely headed for a death spiral.”
In a new blog post, Dr. Hogberg examines the new HHS report released today, “Premium Affordability, Competition, and Choice in the Health Insurance Marketplace, 2014.” He shows that data in the report on silver plans strongly suggests that people who will make a lot of medical claims have signed up for the exchanges.
Those making income under 250 percent of the federal poverty level who selected a silver plan on the exchange are eligible for subsidies to reduce the cost-sharing such as deductibles and co-pays. People who do that in lieu of purchasing a cheaper bronze plan probably do so because they anticipate having a lot of medical costs.
“Prior to today’s report the only evidence that we had to support that was the inordinate number of people purchasing silver plans,” Dr. Hogberg said. “But the data on subsidies in the report shows that people making under 250 percent FPL were likely the biggest buyers of silver plans.”
Under the ObamaCare exchanges, bigger premium subsidies go to those with lower incomes. The report shows that the largest average premium subsidy, $276, was among those who chose silver plans. The average premium subsidy for silver plans was over forty dollars higher than the average premium subsidy for any of the other plan types.
“We’ve seen anecdotal evidence elsewhere that exchange enrollees are less healthy than average,” said Dr. Hogberg. “Today’s report only provides further proof of that.
“The report also tries to spin the exchanges as making health insurance more affordable and expanding the choices that consumers have,” he continued. “But any comparison to what was in the individual market in 2013 shows that’s not the case.”
The report claims that the national average for the second-lowest cost silver plan was $226. Yet the average premium on the individual market in 2013 was about $168. The second-lowest cost silver plan for a 27-year-old in Jackson, Mississippi costs $145 with the largest possible subsidy according to the report. Research from the National Center shows that there were about 36 polices for men and 26 for women that were cheaper than that on eHealthinsurance.com in 2014.
The report tries to boost the choice aspect by claiming that, on average, consumers had 47 plans to choose from and that there is a total of 266 insurance issuers across all of the exchanges. But there were an average of 55 plans to choose from on eHealthinsurance.com alone according to a National Center policy analysis. And other research shows that 360 insurance issuers participated in the individual market in 2013.
David Hogberg, Ph.D., is a health care policy analyst for the National Center for Public Policy Research. Previously, Dr. Hogberg was a Washington Correspondent for Investor’s Business Daily, specializing in health care and Medicare. Prior to his employment at IBD, he worked as a policy analyst studying health care and other issues for various think-tanks, including the National Center for Public Policy Research, and for the office of U.S. Representative Jeff Fortenberry. Dr. Hogberg holds a Ph.D. in political science from the University of Iowa. He is currently working on a book entitled “Medicare’s Victims: How the U.S. Government’s Largest Health Care System Harms Patients and Impairs Physicians.”
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