Obamacare vs the power of the free market & choices
Rep. Joe Pitts: Obamacare premiums to soar in Pennsylvania
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Last Monday, the Pennsylvania Insurance Department announced it would allow all three insurers on its state health exchanges to raise premiums by an average of 46 percent.
In Lancaster County alone, 17,000 people have coverage through the marketplace.
Let’s look at how this will affect people on the individual level. First let’s examine theoretical Stefan, who has been using a silver plan from Capital Advantage for the past year. In 2016, his monthly premium was $339.44; after the Pennsylvania Insurance Commission’s announcement, his premium will jump to $558.14 in 2017.
Next, let’s look at fictional 40 year old Gina: she had insurance through Geisinger and paid $380.58 for her monthly premiums in 2016. It 2017, she will pay $524.84.
Hypothetical Paula, who paid $363.44 for a silver plan with Highmark in 2016, will pay $532.01 for the same plan in 2017.
If you have a plan on the exchange through Keystone, you won’t be able to stay on the same plan in 2017; Keystone will completely withdraw from the state marketplace next year.
Why is this happening? The Obamacare healthcare exchanges were supposed to provide more affordable healthcare for everyone. Why are premiums on the exchange soaring?
The answer is that the theory of Obamacare rested upon two pillars: the participation of health insurers in the exchanges, and millions of people signing up for the plans on the exchanges. The Obama Administration got the buy-in from major health insurers at the very first with the promise that plenty of people would sign up. The Administration anticipated losses to the insurers on the front end, so it created a “risk corridor” to help cover those losses until the exchanges were robust enough to stand up on their own. Except that day never came.
Now insurers are either pulling out of the exchanges because staying isn’t financially sustainable, or they’re raising their premiums so much that it doesn’t make sense for people to purchase coverage on the exchange. Some are going without coverage completely; 26 million in America are currently uninsured.
The original goal of Obamacare was to ensure coverage for everyone. The state of the exchanges today makes it appear that won’t be occurring now or anytime soon.
On the other hand, Speaker Paul Ryan unveiled a plan in June that would allow the forces of the free market to put the power back in the hands of the American people when they choose their health insurance. Under his proposal, Americans would have expanded access to health savings accounts, where they could set aside untaxed money each year to be used exclusively for healthcare expenses. Those who do not receive insurance through their employer would also receive a tax credit each year to purchase coverage. With that tax credit, individuals could choose whichever health coverage plan makes the most sense for their family, instead of choosing from limited options on a state healthcare exchange.
Speaker Ryan’s plan would allow the American people to have more of a say in which path they choose for their healthcare, instead of their seeing choices disappear before their eyes as Pennsylvanians have. Just last year, the options on Pennsylvania’s exchanges decreased from 37 plans (offered by four insurers) to nine plans (offered by only three insurers).
The American people are ready for stability in their health insurance plans and more choice in choosing the coverage that works best for them. Obamacare simply isn’t working, and we all know it.
The sooner we can move on to a system that works, the better.
Congressman Joe Pitts is a Republican who represents Pennsylvania’s 16th Congressional District, which includes portions of Berks, Chester and Lancaster counties.