Obamacare and Health Care Cost: Prognosis Grim

Jonathan Gruber, the MIT professor and Obamacare architect, who got caught in scandalous web woven of his own hubris, was on Capitol Hill last week doing his best to appear sufficiently repentant. Good.

Gruber apparently spent the better part of the last few years travelling the country telling anyone who would listen just how the Obamacare sausage was made. In the several recordings that have been made public Gruber admits to helping write the law in a “tortured way” to hide tax increases and that the resulting “lack of transparency was a huge political advantage.” Gruber was able to accomplish these feats of political subterfuge because “the stupidity of the American voter, or whatever,” proved to be “really, really critical to getting the thing to pass.”

Unfortunately, Gruber is but a symbol of a much larger problem that permeates liberal thought. They tend to believe that decisions are best made by smart bureaucrats in Washington, not the plebeian voters who elected the bureaucrats’ bosses. As Michael Gerson writes:

Politics, in this view, is the grubby business of winning in order to put the proper technocrats in charge of large, complex systems. It also relegates politicians to the job of doing their blocking and tackling, even if it involves deception. The moral goal justifies it all. “Look,” said Gruber, “I wish … we could make it all transparent, but I’d rather have this law than not.”

This reflects a deeper tension within progressivism — working itself out for more than a century — between a belief in democracy and a faith in expertise. . . So progressive elites are left believing that the people are stupid and must be managed, like everything else, in the public interest.

If progressives would only take the time to remove their red-tinted glasses they would see how misplaced their faith really is. After all, is Obamacare really the best that the technocrats could do?

For instance, last year we saw insurance premiums spike, especially for young people, as insurers were forced to cover a number of things that many of their consumers didn’t need. Since insurers could no longer achieve competitive prices by offering various benefit packages they sought other ways to reduce costs, namely by limiting the size of physician networks. Now, we’ve decreased the ranks of the uninsured but have also decreased the number of doctors willing or able to see Obamacare patients.

On top of insurance premiums, out-of-pocket expenses are also soaring under most plans. These expenses, often called deductibles, are how much a consumer has to pay for health care before the insurance company begins to chip in. A recent HealthPocket study found that the average deductible for families in bronze plans will be $10,545 in 2015, or $159 more than this year. Some individual consumers are seeing deductible increases of more than $500.

Many analysts believe that these sky-high premiums and deductibles are just the calm before the storm. As Stephen Parente, a professor of health finance at the University of Minnesota, writes for the Wall Street Journal:

The Affordable Care Act includes two temporary programs that make compliant health-care plans temporarily appear far cheaper than they are: Risk corridors and reinsurance. Both programs will expire on Jan. 1, 2017. By November 2016, consumers will know how that sunset will affect their plan’s premium. . .

We estimate that premiums—especially for the cheapest plans—will increase at a much faster rate after 2016. Bronze plans could increase 45% for families, to about $13,000 from $9,000. Individuals could see a 96% spike, to nearly $4,000 from $2,000. Other plan types—silver, gold and platinum—will see smaller, but still substantial, increases. Premiums for cheaper plans will increase at a faster rate because their deductibles will likely decrease to meet ACA regulations starting in 2016.

As a result for those higher costs the researchers estimate that the health insurance market will contract by 13 percent in 2017 and steadily decline thereafter.

That’s not just an unfortunate side-effect of a flawed law, it’s an outcome that would dramatically undermine the two supposed goals of Obamacare: lower costs and reduced uninsured. Jonathan Gruber has thus far defended the underhandedness in selling Obamacare because he’d “rather have this law than not.” In a few years he may be the only one who feels that way and it doesn’t take a technocrat to figure out why.