Sustainability of the ACA

The intent of the Affordable Care Act (aka Obamacare), to insure under-served Americans, is certainly admirable.  It is crazy, however, to expect a family making $64,000/year to continually bear the full brunt of marketplace rate increases of 9-19% a year.

Middle class families ($64 – 125K/yr) are already paying 8-20% of income to pay for middle-of-the road (silver) coverage, not including deductibles and co-pays. As GAO shows that salaries are increasing slower than cost of living (2% vs. 4.25%) the middle class cannot continue to cover these costs.

Also, about 70% of marketplace enrolees receive a federal credit, payed to insurance providers with our taxes. The GAO estimates that 2017 marketplace rates will rise only 1% for those earning < $64K/yr. I’m no economist but it doesn’t take a genius to understand that working families cannot continue to pay an extra 9% a year for healthcare when wages increase 2% and the government cannot continue to raise the debt ceiling to cover health insurance increases for 70% of marketplace users.

A CBO report estimates that 10 million Americans will likely lose employer-provided coverage over the next 5 years if premiums continue to increase at their current rate. This is (partially) due to laws requiring providers to use State’s statistics when determining liability pools opposed to the group-rate method; effectively punishing employers with a younger, healthier workforce. The CBO estimates that 2017 premium increases will cost the U.S $110 billion and a continued trend of increases will expand the federal budget by $1.3 trillion over the next 10 years.

A complete repeal of the ACA isn’t necessary (IMO) but something must be done to distribute the costs equally. Further, education of newly insured and medicaid recipients is needed. Having insurance is NOT the same as having good health care. The NIH estimates that 61% of medicaid recipients use the ED (the most expensive care) in place of PCPs (the least expensive). Much of the intent of ACA was admirable but financially Obamacare is a failure that is ruing the middle class while simultaneously breaking us as a nation.


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