With premiums expected to increase by twenty-five percent next year, even the New York Times has come to accept that the Obamacare is a costly and inefficient mess:
Premiums for midlevel health plans under the Affordable Care Act will increase by an average of 25 percent next year, while consumers in some states will find significantly fewer insurance companies offering coverage, the federal government said Monday […]
In many parts of the country, the available options are sure to become part of the political conversation in the election season’s closing days. And the rising costs and shrinking options all but ensure that the next president will need to make significant adjustments to the health law, something both Hillary Clinton and Donald J. Trump have promised.
The average increase of 25 percent in benchmark premiums on the federal exchange compares with increases of 2 percent in 2015 and 7 percent this year. Major insurers have pulled out of the public marketplace in many states, citing multimillion-dollar losses, and state officials have approved rate increases of 25 to 50 percent or more for some insurers that remain.
One in five consumers on the federal health insurance website HealthCare.gov will find only one insurer with offerings next year, the administration said.
One positive outcome can be attributed to the law: it has cut the number of Americans living without insurance. Still, the main question supporters of the law will have to answer centers on sustainability: is the health system that Obamacare establishes something that can last as it is currently constituted? Escalating costs are at the root of Obamacare’s woes, and any attempted reforms simply have to address rising costs first. As we’ve repeatedly argued, harnessing the potential of the information revolution is the best way to do so.
Unfortunately, at this point it doesn’t seem that this is the way things will go. With Donald Trump behind with two weeks to go, Democrats are turning their eyes to single-payer solutions, like the one being bandied around in Colorado (h/t Tyler Cowen):
Amendment 69 would alter the state’s constitution to create a single-payer health system known as ColoradoCare. The idea is to replace premiums with tax dollars, and coverage for residents will allegedly include prescription drugs, hospitalization and more. Paying for this entitlement requires a cool $25 billion tax increase, which is about equal to the state’s $27 billion budget. Colorado would introduce a 10% payroll tax and also hit investment income, and that’s for starters. California would look like the Cayman Islands by tax comparison.
Every other detail is left to the discretion of a 21-member panel. The board of trustees would determine what benefits are offered—say, whether your pricey cancer drug makes the cut. The board would also set reimbursement rates for doctors and hospitals, as well as patient co-payments.
The ballot initiative is currently not popular—the eye-watering tax bill probably has something to do with that—but make no mistake: this is the direction many in the Democratic party want to take things.