Obamacare and the deterioration of private health insurance

Laura Ungar and Jayne O’Donnell write in USA Today about a “reversal of fortunes” in health care. It seems that “poor, long-uninsured patients are getting Medicaid through Obamacare and finally coming to [doctors] for care, but middle-class workers are increasingly staying away.”

They are staying away because, according to Ungar and O’Donnell, “coverage [under employer provided health insurance plans] long considered the gold standard of health insurance now often requires workers to pay so much out-of-pocket that many feel they must skip doctor visits, put off medical procedures, avoid filling prescriptions and ration pills — much as the uninsured have done.”

Obamacare clearly was designed to redistribute income from the well-off to the less well-off. Now it seems, similarly, to be operating to redistribute health care itself.

But how much responsibility does Obamacare bear for the high deductibles that are showing up in employer-provided plans? Clearly, it bears some. As Ungar and O’Donnell point out, Obamacare provides a strong incentive for employers to pare down generous plans so they don’t have to pay a “Cadillac tax” on high-cost coverage in 2018.

On the other hand, even before Obamacare was enacted, some employers had begun paring down their plans due to steeply rising health care costs and corporate belt-tightening induced by the recession. The movement to encourage employees to seek shop for the best value in health care by giving them “skin in the game” did not originate with Obamacare.

It’s probably impossible to quantify Obamacare’s impact on the deductibles in employer plans. However, it certainly has accelerated the deterioration in the quality of these plans. One study cited by Ungar and O’Donnell shows that 2014 saw the largest one-year increase in enrollment in “high-deductible plans” — from 18% to 23% of all covered employees.

Obamacare adversely affects employer plans in other ways as well. For example, United Parcel Service removed thousands of spouses from its plan, citing the fact that they are eligible for medical coverage elsewhere.

Whatever one concludes about the causes of the deteriorating quality of employer plans, the effects seem clear. Most obviously, as noted above, people are foregoing needed treatment. According to one study, nearly 30 percent of privately insured, working-age Americans with deductibles of at least 5% of their income had a medical problem but didn’t go to the doctor. And many doctors say it’s only a matter of time before the middle class begins crowding emergency rooms.

It seems likely to me that the architects of Obamacare anticipated the deterioration of employer plans and intended to hasten it. After all, the biggest obstacle to national health insurance along the lines of Canada and Great Britain, the real objective of the left, has been the fact that so many Americans liked their health insurance plans.

But though the Obamacare architects may well succeed in causing people no longer to like their private plans, they will probably thereby create a new obstacle to national health insurance — massive resentment over Obamacare. At this point, who other than an out-and-out leftist would trust the federal government to take complete control over health insurance and our health care system?

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