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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  • QQQ

    I seriously doubt that any of the negative effects (and they are many)
    of Obamacare were unintended. They wanted to take over the industry and
    they figured out a way to do it. Even if they truly ‘didn’t see it
    coming’ they probably would have if they’d actually known what was in it
    before they passed it. But, as Ms. Pelosi said, ‘we have to pass it to
    know what is in it’.

    If I signed a contract and didn’t know what was in the fine print I’d
    deserve whatever consequences happened. Unfortunately for the American
    people the ones who signed it without knowing what was in it and what
    the repercussions were going to be are NOT the people who are affected
    by it. Time for some house cleaning in government.

  • ninguem

    I’d say that about the current administration generally.

    In a larger sense, government generally, both sides can be bad. I’ll just say the left does it more enthusiastically.

    Think of all the things that drive the solo docs out of business.

    Time and again, the solo docs aren’t leaving business and joining groups, because of any economies of scale.

    The big hospital organizations simply rig the system to their advantage.

    Facilities fees.

    Coming from Oregon, the Patel scandal at Kaiser. When people wondered why he hadn’t caught the attention of the Medical Board, it turned out that the reporting rules that apply to me as a solo doc, do not apply to the medical school system (OHSU) and Kaiser Permanente.

    Very simply, they exempt themselves from the rules we ordinary docs are obliged to follow.

    Obamacare, this is just another example. The poor get support. The rich prosper.

    The middle class, the small business, the solo and small group doctors……we ARE small business……are driven out.

    • LeoHolmMD

      Standard imperialism: “savages” have to be eliminated.

  • Patient Kit

    I have a friend in CA who says she really likes the platinum plan she and her husband bought on the exchange there. Until recently, she worked for Microsoft, so I imagine she’s used to good insurance. I’m going to pick her brain more about what, specifically, she likes about her exchange plan vs. any other insurance she could have bought. Obviously, they can afford a platinum plan that many middle class and working class people can’t afford. I don’t know whether she or her husband have any serious pre-existing conditions. But she’s been very vocal about how much she likes her new plan. She’s been in the States for years now, but I should note that she is Canadian and would, ultimately, love to see a single payer system in the US. But right now, she’s happy with her exchange plan. I probably would be too if I could afford platinum.

  • logicaldoc

    Very misleading opinionated article with no comprehensive research mentioned or referenced. Here in NY where I inquired for myself (I get absolutely no subsidy), my Premium actually turned out to be about 30% less for pretty much the same exact Plan offered by BC/BS. Care to expound Robert Laszewski?

  • HJ

    In order to be middle class, you need a good job and good jobs have benefits…

  • Karen Ronk

    Whether you support the ACA or not, there is only one logical conclusion to be drawn. The system, as it stands now, is simply not sustainable with the overwhelming number of those enrolled getting subsidies. At some point, the government will bail out (bribe) the insurance companies so they will not dramatically raise premiums. Of course, some people like the ACA. It is human nature to look at only how one benefits from this program, regardless of the overall cost to others.

  • Joe

    The few patients we’ve seen who signed up all went bronze and have such astronomical deductibles that they might as well be self-pay.

  • ninguem

    Where is “overseas”?

    Where are you practicing?

    • William Viner

      I’m in New Zealand and really enjoying medicine again. If only I could convince my 18 & 21 year old children to live here instead of the US, I’d be overjoyed.

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