How Pillars of Obamacare Caused Sky High Health Care Premiums, and Failed to Boost Youth Enrollment

More on health care, it costs about $500 a month to insure a 40-year-old man. The reason? Obamacare, according to numerous experts and lawmakers on both sides of the aisle. Here to tell us more about how the foundation of Obamacare led to cracks in the insurance market and high premiums is Lawrence Wilson, a reporter for The Epoch Times. Lawrence, welcome to the show, thanks for being here. Your latest report shows that premiums went up over 80% in five years for individuals and small groups. How has the Affordable Care Act contributed to this? Well, the Affordable Care Act was designed around certain features which were intended to make health insurance more accessible to a wider group of people and more affordable, especially to people who weren't insured or couldn't buy health insurance. Well, what appears to have happened is that some of these foundations of Obamacare, the Affordable Care Act created Obamacare. What happened is that some of these provisions actually had the perverse effect of driving up prices and making it harder to afford health insurance. So Lawrence, let's expand on this. Government data shows that there's been a decline of about a million this year with high costs as these enhanced tax credits meant to keep costs down expired. Why would a sustainable health care system need subsidies to survive? Well, Obamacare was built on subsidies, so that's how it was designed that the government would pay a portion of the health care premium for individuals in a certain age, excuse me, in a certain income bracket for lower to middle, lower middle income people. Well, as these enhanced subsidies, these are the ones that just expired, they were added in 2021 to cope with the effects of COVID, but they had the effect as well of raising premiums so that during that period, premiums just shot up again as they had stabilized after a period of growth in the early years. To put it simply, it became a vicious circle. The more money you put in, the higher the premiums go, the more money the government needs to put in so that people can afford their insurance premiums. It just spiraled because of these enhanced subsidies in part. Well, and when you talk about expanded access, the Centers for Medicaid and Medicare Services, they say that 23 million people had these ACA or Obamacare plans in 2026. Open to comment more on that number. And some experts said that youth enrollment in Obamacare would reach 38 percent. That never happened. According to the Department of Health and Human Services, it's been at or below 28 percent for over a decade. Why? Well, that was one of the pillars of Obamacare, one of these foundational things that made it work was called the individual mandate. Everybody had to buy health insurance, and that included younger people. Now, that was intended to even out the risk for the insurers because younger people don't cost as much to insure. They don't get sick as much. They don't go to the doctor as much. But younger people also know that. And so they find it easier to go without health insurance, especially because Obamacare raised premiums for everybody, but they went up more for younger people because of another foundation, something called community rating, so that it no longer were people judged or priced purely on their age or health factors, but it was more or less the same for everybody in a geographic region. So younger people have opted out. It's been about 28 percent or lower for the entire history of Obamacare. Very interesting. What can you tell us about the Trump administration's health care affordability plan? How different would this be to what exists now? Well, the difference primarily is that it depends on free market forces in order to keep prices regulated rather than government regulation. So some of the things that are included there are the attempts to lower drug prices, create more competition there, and the attempts as well to give people health savings accounts that are funded. So rather than giving a subsidy to an insurance company, you make that available to the individual. You can go do whatever you want for health care. You can buy insurance or do whatever. But Democrats have opposed those free market reforms. Either way, it's complex because right now about 62 percent of people are covered by employer-sponsored insurance. About 30 percent of people are receiving some form of federally subsidized health care through Medicare, Medicaid, or Obamacare. So it's a very broad problem and very difficult to solve. Well, it is a conundrum. And when we talk about the penalty, that mandate going up from maybe just under $100 to over $600 for a person who didn't want to buy into Obamacare, that doesn't on the surface appear to be a free market solution to this. But now if you have people who maybe have pre-existing conditions, may find it hard to get insurance, is there any way to include those people in a broader health care plan, you know, governmental organization plan that can help bring that but not bring the high prices that we've seen from Obamacare? Well, this is the problem. When you have an insurance program versus pure health coverage, which is just we'll pay for your health costs, whatever they are, when it's insurance, that depends on risk. So insurers used to price their premiums based on risk. And if you knew that a person was already suffering from a chronic illness, for example, then you would price them higher because you knew they'd go to the doctor more and they are more likely to have a serious illness. When you make insurance available to everyone, regardless of health conditions, which is what Obamacare did in its markets, people like that because everybody can be insured. But it's almost guaranteed to increase the cost of the insurance because insurers have to recoup the money that they're spending on care somehow, and that's through increased premiums. Understood. If you want something, you have to pay for it. Now also, there's another pillar of the Obamacare Foundation, which is this demographics pricing coordination. Can you elaborate on the effects that this has had? Well, that again was almost guaranteed to increase the cost of insurance. Insurers used to rate or price people based on their own health profile or of the small group that they were in, say a small company, their employees. And so if everybody that worked at your company was, say, above 60 years old, well, it was going to cost you a little more for health insurance. If you had a company that had 25 people working for you, they were all below age 35, well, it would probably cost you less, no more. With Obamacare, people are rated based on their geographic region with only slight variations for age and for whether or not they use tobacco. Other than that, everybody who's, say, 40 years old will pay about the same price for insurance. And that, to balance it out, insurers just had to raise prices for everybody. And Lawrence, you've been doing so much research on this, and we've seen that Obamacare has some shortfalls. It's driving up prices. We look back even to 2014, maybe we can go back a little bit further. Do we have evidence that suggests that this free market approach does work? Because we have evidence to suggest that Obamacare isn't providing the solutions that Americans need right now. The best evidence for that would come from other industries, because healthcare was already highly regulated before Obamacare. So that's been a feature in the healthcare industry for a long time. And again, a large percentage of people who have some sort of health coverage haven't already provided by the federal government. Tens of millions of people through Medicare, Medicaid, the Veterans Administration, and so on. So we haven't really had a true free market in healthcare for quite a long time. Very fascinating. So what are the next practical steps, say, for lawmakers or for the average American, in order to get the healthcare coverage they need at an affordable price? Well, there are alternatives that are neither Obamacare nor traditional insurance. There are some things out there like health sharing plans, there are a number of those that people basically form an association together in order to help share the costs of their own medical coverage. There are other ways to get health insurance that are less expensive. For example, some, especially younger people, will buy catastrophic insurance or some form of insurance that only pays for major things. So if you have to go to the doctor, you pay for that out of your own pocket, but maybe it's cheaper than paying premiums every month for a traditional healthcare program. Legislatively, it's going to be anybody's guess. There are two forces at work here. One are those who are looking to expand free market options, and there is the other side who says, hey, the only way we can really do this is to get more government control over healthcare and the delivery of healthcare. And they've been battling it out in Congress. As you've seen, these Obamacare enhanced subsidies were just one example. And we'll have to see what Congress does with that over the long term. Understood. Lawrence Wilson, great talking to you today. A lot of important knowledge brought out. Thanks for joining us. My pleasure.