Mar 15, 2018
Obamacare Bailouts Aid Insurers, Not Consumers
Post by Freedom Partners
Over the past several weeks and months, there has been resounding opposition to using taxpayer dollars to prop up health insurance companies, and for good reason. Current proposals would send hundreds of billions of tax dollars directly to insurance companies under the false pretense it would lower costs. But, recent news reports indicate that taxpayer bailouts for health insurers are still among Congressional budget negotiations.
“The case for the subsidies seemed to grow this week, after preliminary data from the Congressional Budget Office projected that restoring the funding would lead to a double-digit drop in average premiums in Obamacare markets next year.
“Sen. Lamar Alexander (R-Tenn.), a key author of the stabilization effort, said it is not over. “Oh no, of course not,” he told POLITICO Thursday. “It would be a shame if we miss an opportunity to lower rates for hardworking Americans by 40 percent.””
We know this doesn’t work because If Congress genuinely wants to lower the skyrocketing costs of health care, they’ll do so by working to provide more choice and competition among insurers, not by lining their pockets with billions of dollars in subsidies. The extension of short-term plans, as recently proposed by the White House, is one option for getting that done. While subsidies would reduce premiums by 10%, short-term plans would cut costs by as much as 75% – and at no cost to taxpayers.
Scott Flanders, CEO of eHealth, Inc., recently argued in a piece published by STAT News:
“In just five years, the average premium for traditional family coverage in the individual insurance market has increased 174 percent, from $426 per month in 2013 to $1,168 per month today — $410 higher than the average mortgage payment. For families that don’t qualify for government subsidies, that puts the outlay for health insurance at more than $14,000 per year.
“Good luck paying for that on a typical American family’s budget, even in a two-income household. Is it any wonder that 27 percent of short-term policyholders turn to it because it’s the most affordable option available? The average monthly family premium for short-term health plans in 2017 was $267, about one-quarter the price of an ACA plan.”
Earlier this month, Wyoming Senator John Barrasso introduced the Improving Choices in Heath Care Coverage Act, legislation that that expands access to affordable, short-term, limited duration health plans and would codify into law a recent Trump administration rule that reverses an Obama-era regulation which restricted the time people could be enrolled in short-term plans to just three months. Further, Senator Barrasso’s bill guarantees the renewability of the short-term plans – a positive step towards restoring the ability for millions of Americans to choose health care coverage that best fits their needs.
Using taxpayer dollars to bailout insurance companies will do nothing to help lower the costs of health care for the millions of patients who need it most. Congress should keep their focus on working to remove barriers to competition and strip away burdensome mandates and regulations.