If health coverage is “free,” and will cover individuals’ pre-existing conditions after they develop them, is it really “insurance”?
Those dual questions should echo in Americans’ minds as the Biden administration attempts to trumpet enrollment increases on the Obamacare Exchanges. Some may view the development as less an expansion of health insurance and more like an illustration of Democrats’ bloated welfare state.
Signing Up for ‘Free’ Coverage
The “historic” announcement that 21.3 million individuals selected an Obamacare Exchange plan during this year’s open enrollment period came with a significant catch. According to the administration, “four in five healthcare.gov customers” — that is, the 16.3 million enrollees who selected a plan using the federally-run exchange — “were able to find health care coverage for $10 or less per month for plan year 2024 after subsidies.”
To take this statement at face value, at least 13 million Americans (80 percent of the 16.3 million using the federal exchange) only signed up for coverage when said coverage cost them less than $10 per month. If the 5 million people using state-based exchanges behaved in roughly the same way, that would mean about 17 million people — 13 million using healthcare.gov, and 4 million using state exchanges — only signed up for coverage that was “free” to them, or very nearly so.
Greater Subsidies, Greater Spending
In some respects, the insurance buying dynamic remains unchanged, 10 years after the exchanges first opened. Only individuals who qualify for the highest subsidies sign up in any great numbers. For instance, in 2015 I noted that while just over three-quarters of individuals (76 percent) qualifying for the highest subsidies enrolled in the exchanges, only one in six (16 percent) individuals with incomes between three and four times the federal poverty level — who qualified for much smaller subsidies based on their higher incomes — bothered to sign up.
However, the Biden administration and Democrats increased Obamacare subsidies, first in the 2021 “stimulus” measure, then for an additional three years in the Inflation (Reduction) Act. Because of those subsidies, some individuals now pay nothing for a benchmark insurance plan. Sure enough, the number of individuals below the threshold to receive “free” benchmark coverage rose dramatically under the new subsidy regime, and now totals nearly half (46 percent) of all exchange enrollees.
In other words, the “Affordable” Care Act didn’t make care affordable, just like the Inflation Reduction Act didn’t reduce the cost of health care. They just threw increasingly larger amounts of money at the problem, in the hopes of getting more people onto the rolls. That doesn’t amount to an expansion of health insurance so much as further growth in the welfare state.
How About Paying Obamacare Taxes?
That said, Democrats will undoubtedly use the “success” of getting more people to sign up for “free” coverage to extend the enhanced subsidy regime when it expires next year, at taxpayers’ expense, of course. But as a recent Wall Street Journal editorial notes, the much higher take-up of the “free” insurance means that the expected costs of such an extension are likely to balloon far above prior Congressional Budget Office estimates.
There’s a further irony that these pages have previously explored. For all his supposed support for Obamacare, Joe Biden doesn’t exactly love the law when it comes to paying for it himself. In fact, since leaving office as vice president in 2017, Biden used a loophole his own administration has decried as allowing rich people to “avoid paying their fair share of taxes” to dodge over $120,000 in Obamacare levies — along with roughly $400,000 in Medicare taxes.
While Biden was dodging his Obamacare obligations, what was he doing instead? Spending $2.7 million on a Delaware beach house, and renting this luxury pad outside Washington:
As Biden himself likes to say, “Don’t tell me what you value. Show me your budget and I will tell you what you value.” Joe Biden’s family budget tells us what he values, and it isn’t Obamacare. It’s Joseph Robinette Biden.
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