Brooks: Obamacare Comes Into Painful Focus

Thursday, December 26, 2013
By: RJC Executive Director Matt Brooks

Like one of those Polaroid instant photographs developing slowly in your hand, the details of Obamacare are coming into focus bit by bit. With each week, we learn more about the serious problems that Obamacare is causing for millions of Americans.

First hit were those whose individual insurance plans purchased in the private market did not meet Obamacare’s definition of “comprehensive.” President Obama said that only a small percentage of people would lose their old insurance plans this way. In reality, HHS estimated that 40-67 percent of individual policy owners would lose their coverage.

Next came tens of millions of people employed by small businesses. Their old insurance plans are being cancelled and the new plans have higher premiums, higher deductibles, and narrower provider networks. An estimated half to two-thirds of the people who get their insurance through their employer’s small group plan will have lost their current insurance by 2015.

As Obamacare forces insurance companies to cancel policies and replace them with more expensive alternatives that conform to government criteria, more people are forced out of the private market and into the Obamacare exchanges.

President Obama said that the plans available in the exchanges would be better and more affordable. Under Obamacare, all insurance plans must offer the same basic set of benefits, including maternity care, pediatric benefits, and addiction services. That makes all of the plans more expensive. Many middle class families, who don’t qualify for premium subsidies, will pay more for the plans in the Obamacare exchanges than they were paying before.

There is another side to health care costs that is just coming into focus now, too: high deductibles and high out of pocket costs. Many people choosing new plans from the Obamacare exchanges or from their employer’s offerings are finding that their insurance won’t begin paying for care until they’ve spent $5,000, $10,000, or more of their own money toward the deductible first. And once the deductible is met, the coinsurance (the amount the plan pays) may be as low as 60 percent, leaving the individual to pay the rest of the bill for their care. Most plans today have an “out of pocket” cap to prevent people from losing everything in the event of a serious health problem. But in the exchanges, some plans are offered with out of pocket protection only for care provided in-network. If you go to a doctor or hospital outside of your network, your insurance plan may pay nothing.

The President promised you can keep your doctor, but you might have to pay a lot more to see him or her. To keep costs down, insurers are cutting back their provider networks. People are finding that the doctors and hospitals they rely on are not part of their new network. In Georgia, one of the five insurers offering plans on the exchanges has just one hospital in the entire state in its network. In California and New York, major plans exclude the world-class Cedars-Sinai Hospital in Los Angeles and New York City's Memorial Sloan-Kettering.

These narrower networks mean that millions of people, including those with serious illnesses, will lose access to the pediatricians, family doctors, specialists, and hospitals they trust. So while people with serious illnesses or chronic conditions can indeed buy insurance plans in the exchanges at the same rate as anyone else and cannot be turned away, whether they can keep their doctors as the President promised is a different question.

Many people with serious and chronic illnesses will also be shocked to learn that drug costs are much higher under Obamacare. Lower premium plans have higher out of pocket costs for medications, and insurance may pay as little as 50 percent of drug costs after the higher deductibles are met. The retail price of some medications used to treat cancer, rheumatoid arthritis, HIV and other conditions can be thousands of dollars per month. Patients may pay considerably more for drugs under Obamacare plans than they paid under previous plans.

Low-income individuals and families face a different access issue: the single option available to them on the Obamacare exchanges in many states is Medicaid. In fact, the vast majority of those who have enrolled via the exchanges so far have actually enrolled in Medicaid, not an insurance plan. In many places, doctors are refusing to see new Medicaid patients because of the drastically below-market payments they receive for their services to those patients. Coverage without access is not the good health care uninsured Americans were promised.

One of the most visible signs of trouble with Obamacare was the disastrous rollout of the web site portal that was supposed to make learning about and buying insurance plans in the exchanges as easy as shopping at While it’s now possible for more people to access the web site, many very serious problems remain. The site still has extremely poor security, endangering the private information of users. The back-end of the site (really the most important part) sends garbled information to the insurance companies for nearly a third of all applications. Medicaid applications are not being sent to state authorities properly. The payment system, where individuals pay their premiums and the government pays the subsidies, hasn’t even been built. Because insurance companies and states have bad data, no payments, and no way to verify information about applicants, a significant percentage of people who think they’ve enrolled in an Obamacare plan or Medicaid will find themselves without insurance coverage on January 1.

As the true picture of Obamacare becomes clearer, Americans are responding with some of the lowest approval ratings the President and his health care plan have seen to date, notably among women and younger voters, key Democrat constituencies. Most Americans, according to recent Gallup polls, believe that Obamacare should be repealed or scaled back. An AP/GfK poll showed that nearly half of those with employer-provided insurance said their plan was changing and getting more expensive – and three-quarters of those said it was because of Obamacare. As the truth about Obamacare become clearer, it will be Democrats at the ballot box next year that really feel the pain.

Matthew Brooks is the executive director of the Republican Jewish Coalition. This article was published in the Washington Jewish Week, December 26, 2013.