Health Care: A Troubling Story
As the government shutdown slogs along, Democrats bellow “health premiums will double,” if enhanced ObamaCare subsidies expire on 31 Dec., as scheduled. Chris Jacobs, founder and CEO of Juniper Research Group, a consulting firm, explains in the WSJ, why that would be shocking if it were true, “but it isn’t.”
The misleading claim is based on research by KFF, formerly the Kaiser Family Foundation. It ignores the sizable subsidy that the federal government will still provide to most exchange enrollees if the enhanced subsidies expire and overstates the expiration’s effect on most households.
Q: Mr. Jacobs, WSJ readers want to know if premium estimates will rise (perhaps sixfold) in 2026 in one month?
A: Jacobs:
No. KFF’s 2nd study was misleading. It used cleverly parsed terms—“premium payments” rather than “premiums”—to conflate total premiums with enrollees’ out-of-pocket payments. The two aren’t the same. Focusing on the latter to the exclusion of the former, as the September study did, omits important context.
Q: What about the foundation’s home page warning, “premiums will more than double”? A KFF vice president, you point out, acknowledged that the claim was inaccurate and that the graphic would be updated to be more precise. KFF, however, did not advertise the correction. It edited the graphic without publicly disclosing its error. Can you elaborate?
A: Jacobs:
Of course.
KFF’s own work demonstrates that the federal government will still pay the vast majority of most enrollees’ premiums if the enhanced subsidies, first enacted under the Biden administration in 2021, end.
Its analysis last July found that in 2024 the enhanced subsidies paid an average of 88% of enrollees’ overall premiums. Without them, the federal government would have paid an average of 78% of enrollees’ premiums last year. KFF hasn’t published a more recent analysis, but other groups have confirmed that federal dollars will continue to pay the lion’s share of most enrollees’ premiums if the enhanced subsidies expire.
Q: So by focusing solely on percentages, this obscures the difference between absolute and relative increases in out-of-pocket enrollee spending?
A: Jacobs:
In many ways, the large projected cost increases in percentage terms reinforce the richness of the enhanced subsidy regime, under which nearly half of enrollees qualify for zero-dollar (free) benchmark coverage.
Most exchange enrollees will face moderate increases in out-of-pocket costs in dollar terms. KFF estimated that the average enrollee will pay $1,016 more per year, or $84.67 more per month. A separate study from the Urban Institute concluded that households with incomes below 250% of the poverty level—who receive the richest subsidies and comprise roughly three-quarters of all exchange enrollees—will pay an average of $750 more a year, or $62.50 monthly.
Q: KFF researchers claimed they couldn’t quantify the financial effect on the median enrollee. But given the results from KFF and the Urban Institute, won’t most households likely face increases of $50 to $100 a month?
A: Jacobs:
Some will face more-substantial costs if the enhanced subsidies expire.
Whereas ObamaCare limited subsidy eligibility to households with incomes below four times the poverty level, the enhanced subsidies eliminated that cap. If the enhanced subsidies expire, the cap would return, and households with incomes just above it could face thousands of dollars in heightened costs. But even here, KFF data show that such households represent a mere 7% of enrollees.
The Urban Institute estimated that the uninsured rate among this cohort would rise only modestly, because they “are more likely to pick up coverage from an employer” and “are more willing to pay the full premium.”
Reasonable people can disagree about the wisdom of a $50 to $100 monthly cost increase for households of modest means.
… given the Congressional Budget Office’s estimate that 2.3 million exchange enrollees “improperly claimed” subsidies “via intentional overstatement of income” this year, allowing the “free” benchmark coverage provision to lapse—requiring households to pay something toward their health insurance—seems necessary to combat fraud.
The left’s apocalyptic rhetoric about the expiration of the enhanced subsidies belies that federal taxpayers will still subsidize three-quarters of enrollees’ premium costs.
KFF’s misleading claim about premiums’ doubling echoes the maxim of not letting a good crisis go to waste, even if one (must) use deceptive rhetoric to overstate the supposed “crisis.”
Taxpayers footing the bill for ObamaCare subsidies shouldn’t be fooled by the scaremongering of the welfare-industrial complex.
Senator Rick Scott, CEO of Columbia/HCA (a hospital company), weighs in at the WSJ:
It is time to end (the) madness by lowering the cost of healthcare, encouraging innovation at the state level, stopping fraud and waste in the system, increasing competition in the health insurance and provider markets, and giving the American people the ability to spend healthcare dollars in the way that best meets their individual needs.
Congressional Democrats have said the quiet part out loud: They want the federal government to keep cutting massive checks to insurance companies forever, using your tax dollars to shore up the sinking ship of ObamaCare.
They’ve even shut down the government to demand it.
