Obamacare plans aren’t attractive to the middle class

The administration issued a report recently that says individuals who selected plans in the federal health insurance exchanges have a post-credit premium that is on average 76% less than the full premium for the plans they selected. And, 69% are paying less than $100 after the subsidies — 46% are paying $50 or less.

The administration also pointed out that 65% of individuals selecting the silver plan in the federal exchange chose the lowest or second-lowest cost silver plan.

As I have said before, only about one-in-three subsidy eligible people bought and paid for coverage during Obamacare’s first open-enrollment.

It would appear from this data that it is the lowest income people who are most often signing up for coverage. They are the ones who get the biggest premium subsidies as well as the reductions in their deductibles and co-pays.

The Obama administration has been touting the report. The new HHS secretary said, “We’re finding that the marketplace is working. Consumers have more choices, and they are paying less for their premiums. Nearly 7 in 10 consumers who signed up in the marketplace are paying $100 or less for that coverage.”

That is one way to look at it.

Here is another. The lowest income people — who pay the lowest premiums and out-of-pocket costs — are the ones who are obviously signing up. That explains why the average consumer subsidy is so high and the average net cost is so low.

As I have said before, the biggest consumer problem Obamacare has is that the plans — with their still high premiums even after the subsidy, big deductibles, and narrow networks — are not attractive to working class and middle class families and individuals who don’t qualify for the biggest subsidies.

Simply, the Obamacare plans are unattractive to all but the poorest who get the biggest subsidies and the lowest deductibles.

The CBO said that 87% of the 30 million who they project will still be uninsured in 2016 will not pay an individual mandate fine because of all of the Obamacare hardship exemptions. Obamacare looks to be on its way to creating a chronically uninsured class.

I understand the administration’s desire to spin the enrollment results. But if they want to see Obamacare’s approval ratings rise above their longstanding abysmal results I suggest they take a hard look at why two out of three subsidy eligible people aren’t buying it and work to make these plans more attractive for them.

Robert Laszewski is president, Health Policy and Strategy Associates and blogs at Health Care Policy and Marketplace Review.

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