Obamacare | The Government's Takeover of Health Care
Obamacare Subsidies to Cost Billions This Year
Created on Thursday, 03 July 2014 08:13
Written by Justin Credible
The big pitch for Obamacare was that millions of Americans would now be able to afford health insurance provided by the government. The reality is almost the exact opposite: health insurance premiums have skyrocketed under Obamacare and taxpayers are getting stuck with the costs, paying for Obamacare subsidies. Despite projections being less, Obamacare subsidies are on track to cost billions of dollars in the first year alone. And there are still millions of people who don't have health insurance.
From the Los Angeles Times:
The large subsidies for health insurance that helped fuel the successful drive to sign up approximately 8 million Americans for coverage under the Affordable Care Act are on track to cost billions of dollars this year, a new federal report indicates.
Nearly nine in 10 Americans who bought healthcare coverage on the federal government’s healthcare marketplaces received government assistance to offset their premiums.
That assistance helped lower premiums for consumers who bought healthcare coverage on federal marketplaces by 76% on average, according to the new report from the Department of Health and Human Services.
Premiums that normally would have cost $346 a month on average instead cost consumers just $82, with the federal government picking up the balance of the bill.
Though the generous subsidies helped consumers, they also come at a price.
The report, though missing data from some states, paints one of the fullest pictures to date of the actual cost of the 2010 healthcare law’s coverage expansion.
It suggests that the federal government is on track to spend at least $11 billion on subsidies for consumers who bought healthcare plans on marketplaces run by the federal government, even accounting for the fact that many consumers signed up for coverage in late March and will only receive subsidies for part of the year.
That total does not count the additional cost of providing coverage to millions of additional consumers who bought coverage in states that ran their own marketplaces, including California, Connecticut, Maryland and New York. About a third of the 8 million people who signed up for coverage this year used a state-run marketplace.
Federal officials said subsidy data for these consumers were not available.
If these state consumers received roughly comparable government assistance for their insurance premiums, the total cost of subsidies could top $16.5 billion this year. Making precise estimates is difficult because of expected fluctuations in enrollment over the year.
That total would be approximately in line with projections from the nonpartisan Congressional Budget Office.
The state-based marketplaces -- a centerpiece of the Affordable Care Act -- enable Americans who do not get healthcare coverage at work to select among plans that offer at least a basic set of benefits. The plans cannot turn away sick people.
Consumers who make less than four times the federal poverty level, or about $94,000 a year for a family of four, qualify for subsidies to offset the cost of their premiums in most places.
Billions of dollars in Obamacare subsides are nothing. They will end up costing hundreds of billions of dollars when people start losing their health insurance and are forced into the Obamacare exchanges.
Justin Credible is a contributing editor for Habledash.