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Obamacare: First You Pass It, Then You Learn What It Does

We’re shocked, shocked to hear that there may be yet another way Obamacare is costing more than originally advertised.

One of the key features of the Affordable Care Act was the creation of a Pre-Existing Condition Insurance Plan to help those with pre-existing conditions get and keep coverage. According to MedPage Today, the Centers for Medicare and Medicaid Services recently stopped enrolling people in the plan. Even though far fewer people have signed up than expected and $5 billion had been budgeted for it, the program is already running into financial problems:

“What is surprising is that so few people have signed up and drained the program. The expectation was that lots more would sign up than have, but the money is gone anyway,” Robert Laszewski, president of Health Policy and Strategy Associates in Alexandria, Va., told MedPage Today in an email. “The concern I have is does this mean the sick people that will come to the exchanges are going to be way more expensive than we thought they would be?”

Meanwhile, a report by the left-leaning Urban Institute shows that Obamacare hangs together by a delicate web of subsidies and counter-subsidies. Under current market conditions, health care premiums for older (and, thus, sicker) Americans cost on average five times more than premiums for younger and healthier Americans. Obamacare mandates, however, that insurers cannot charge older adults more than three times what they charge younger adults. In other words, the law forces the old-to-young rating band from 5:1 to 3:1.

Because of this, “the ACA will increase costs for young adults and families purchasing such [non-group insurance] coverage.” In effect, the narrowed rating bands are a subsidy given to older Americans at the expense of younger Americans. To limit the rating band’s impact on out-of-pocket costs for the young, Obamacare creates counter-subsidies—for example, by allowing dependents to continue coverage under their parents’ health care plan well into their 20s.

Problem solved, right? Not quite. Eventually, someone has to pay the bill—and that bill is looking a lot more expensive than advertised.

Story after story has shown this since the rollout of Obamacare. Congress passed this law without understanding either how it would be implemented or how it would change the health care system. Experience may be the best teacher, but in this case the price of the lesson is too high.

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