Obamacare in 2017: Much higher premiums, much less choice

The Obama administration admitted today that Obamacare premiums will rise an average of 22 percent for the Silver Plan in 2017. The Silver Plan is the Obamacare benchmark upon which federal subsidies are based.

The subsidies will shield many Obamacare purchasers from the impact of the increase, but a large of number of purchasers will be hammered. And, of course, taxpayers will be hit as well by virtue of the increased subsidy payments.

Most significantly, the skyrocketing premiums non-subsidized Obamacare customers face will fuel the cycle that’s causing premiums to skyrocket. Premiums have risen dramatically because too few healthy people who aren’t entitled to subsidies are enrolling in Obamacare. Thus, those who haven’t yet eschewed it are required to pay more.

But the more they are asked to pay, the more likely they are to eschew Obamacare in the future. This will mean that premiums must be significantly hiked again the next time, and the cycle — or “death spiral” — will continue.

Premium hikes aren’t the only bad news for those who purchase Obamacare and for the viability of the program. The number of Obamacare carriers will drop from 298 to 228 next year in the federal exchange and selected states. And 21 percent of consumers returning to the exchanges will only have one carrier to chose from, though that insurer may offer multiple plan choices.

Finding a doctor and hospital one likes will also be more challenging than ever for Obamacare consumers in 2017. To keep costs down, insurers have been narrowing their networks of providers, says Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute.

With premiums higher and choice of plans, doctors and hospitals reduced, the “death spiral” will likely accelerate.

The enrollment figures already reflect disenchantment with Obamacare. Last year, the CBO projected that enrollment would reach the 20 million mark this year. Now, it has revised its estimate down to 13 million.

What impact will the bad Obamacare news have on the upcoming election? I doubt that it will move the needle much in the presidential race. Unfortunately, the battle lines between Clinton and Trump have been drawn elsewhere.

Congressional races are probably another matter, especially if the Democrat voted for Obamacare or against its repeal. In Arizona, where Obamacare is truly a mess, Sen. John McCain has hammered Rep. Anne Kirkpatrick over the issue — to good effect. It’s difficult to see Sen. Evan Bayh, whose vote was necessary to pass Obamacare, not being damaged by the latest news.

For these and other Republicans in tough races, the Obamacare news can be thought of as a favorable “October surprise.” All over the country, Republican congressional candidates should be trying to break Sen. Tom Cotton’s single debate record for mentioning his opponent’s support of Obamacare (around two dozen times, I think).

There really isn’t anything surprising, though, about Obamacare’s latest woes. They were widely predicted. Obamacare was ill-conceived — so ill-conceived that some suggest it was designed to fail and be replaced with a single-payer style system.

Obamacare’s passage is an object lesson in what happens when Democrats control the White House and the Congress. The latest news should help drive that lesson home just in time for the election.

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