When Stephen Blackwood’s mother was diagnosed with carcinoid cancer at age 49, it was a blow to the entire family. They would have to watch helplessly as the disease gradually claimed her health and her life.
Only a few things could slow the onset of her cancer: Expensive and painful Sandostatin shots, multiple appointments with specialists and several surgeries. Fortunately, she had a Blue Cross Blue Shield health insurance plan which was expensive but covered all of her treatments.
Then, in 2013, she lost her health insurance, thanks to the passage and implementation of the Affordable Care Act.
Desperate for coverage, she attempted to sign up for health insurance through healthcare.gov, but was unable to even browse the available plans due to a glitchy website (a widespread problem that made national news at the time). Her son alleges:
Because the exchange website in her state (Virginia) was not working, she went directly to insurers’ websites and telephoned them, one by one, over dozens of hours. As a medical-office manager, she had decades of experience navigating the enormous problems of even our pre-ObamaCare system. But nothing could have prepared her for the bureaucratic morass she now had to traverse.
When she finally found a plan, it did not come close to the coverage that her former plan offered. One of the things that was not covered under the new plan: the Sandostatin treatments that mitigated her symptoms and delayed the progression of the cancer. Stephen Blackwood says:
I understand that the intention—or at least the rhetorical justification—of this legislation was to provide coverage for those who didn’t have it. But there is something deeply and incontestably perverse about a law that so distorts and undermines the free activity of individuals that they can no longer buy and sell the goods and services that keep them alive.
Many More People Are Discontent Under The Affordable Care Act
The Blackwood’s story is dramatic and demonstrates the often-frustrating, sometimes-tragic impact of the early implementation of the Affordable Care Act.
But while unusually dramatic, the story is not an anomaly.
In fact, as the Affordable Care Act has matured, reports of individuals who are discontent with their plans have only increased. Overall, of people with ACA coverage in both 2015 and 2016, far more find it is becoming worse rather than better.
- Twenty-three percent report that they have a worse selection in hospitals and doctors in 2016 while only 13 percent report better selection from 2015.
- Thirty-four percent report that they feel less financially protected in 2016 while only 16 percent report an improvement in financial protection from 2015.
- 37 percent report that insurance is a worse value to them in 2016, while only 27 percent report it is a better value from 2015.
The below graph provides a few more telling statistics.
The chart above is just for people enrolled in ACA plans in the individual market. As Mercatus senior research fellow Brian Blase has noted, there are less than half the number of exchange enrollees in 2016 compared to initial projections. This is a strong indication that most eligible people, particularly those with income too high to qualify for large premium and cost sharing assistance subsidies, find the available plans not worth their cost. The question we now have to answer is why? Why are so many people unhappy under the Affordable Care Act? While a number of complicated factors are at play, a few are worth noting here.
1). People Are Having to Switch Their Plans…and Then Settle for Less
The first element to consider is change. Forty-three percent of returning healthcare.gov visitors selected new plans in 2016. Some simply wanted cheaper plans. Others, however, did it because the plans they had selected the year before were simply no longer available.
2). Thanks to High Deductibles and Rising Premiums, the Plans Aren’t As Attractive as Promised
Another reason so many people might be dissatisfied with healthcare might be because of the plans’ high premiums and high deductibles—the out-of-pocket price someone must pay before their insurance begins covering their medical expenses.
New Jersey resident David Reines, age 60, told The New York Times:
The deductible, $3,000 a year, makes it impossible to actually to go the doctor. We have insurance, but can’t afford to use it.
He suffers from chronic knee pain but is unable to see a specialist.
Karin Rosner, who lives in the Bronx, faces a similar situation. She has an eye condition that puts her at risk for a detached eye retina, but refuses to see a specialist thanks to her $1,750 deductible. It simply isn’t feasible, given her $30,000 salary, and the $300 a month she spends on the ACA’s silver plan.
The New York Times reports that more than half of all ACA plans involve deductibles that are $3000 or more.
Evidence also indicates that the ACA has caused premiums to rise (I’m skeptical of recent news to the contrary; I address why in another article.)
University of Pennsylvania economists suggest that “the pre-ACA average premium was lower than the lowest silver plan premium,” and they note that premiums and out-of-pocket payments may have increased anywhere from 14 to 28 percent as a result of the ACA.
It’s not difficult to see why customers are unhappy with the direction their health coverage has taken.
3). Young and Healthy People Aren’t Supporting the System.
If you don’t enroll in health insurance, you have to pay a $675 tax penalty, or 2.5 percent of your household income, whichever is higher, to the IRS.
In 2014, about seven million Americans have opted for the penalty, because it’s cheaper for them than buying health insurance.
According to the TechTimes, Clint Murphy, a healthy 45-year-old engineer who lives Sulphur Springs, TX, did the math: While he would have to pay $1,800 for not having insurance, enrolling in an insurance plan would cost him $2,900. The cost-benefit analysis is clear here: the cost of $1,100 is a small price to pay to forego health insurance coverage.
“The fine is still going to be cheaper,” he concluded.
This is something the government didn’t account for. Without young, healthy individuals buying insurance and thereby paying into the system, the government is finding itself saddled with the responsibility for supporting the healthcare of the older, sicker population.
As a result, the quality of care decreases while the cost of coverage skyrockets. And that will mean even more relatively healthy people choosing to opt out of the system.
It’s unsustainable. And based on how it’s working for the Americans it’s supposed to be helping, we’re already starting to see it buckle.