Broken Promises of Obamacare

Published October 25, 2011

When he was selling his health care reform law to the American people, President Obama made numerous promises. We were assured small businesses would receive tax credits to offset the law’s premium costs; Medicare would be protected; the law would cost under $1 trillion over 10 years; people would be able to keep their current insurance plans; insurance premiums would be reduced; and health care costs would stop rising.

President Obama recently reiterated that he still believes in the promises of the law. Yet the policies in “ObamaCare” have failed to deliver on many of their major promises — and the law is not even fully in effect.

Small Businesses, Seniors Hit

Obama promised small businesses they would receive tax credits to help alleviate the large premium costs in the bill. The Small Business Tax Credit is supposed to be the primary tool for doing this. But not only is the tax credit uselessly small—the Congressional Budget Office (CBO) estimates it will only affect 12 percent of people in the small-group market—but it ends in 2017.

Obama promised seniors their Medicare plans would be protected. But Medicare’s chief actuary, Richard Foster, has revealed Medicare is anything but safe. Between 2014 and 2023—the first 10 years of Obamacare’s full implementation—Medicare Part A and B will be cut by a combined $1.05 trillion under the law.

Foster has also revealed reductions to Medicare Advantage, the popular private supplemental insurance that almost one-quarter of Medicare beneficiaries enroll in, will cause almost half of current Advantage enrollees to lose their plans.

Higher Deficits, Less Coverage

In order to ease voters’ debt concerns, Obama assured Americans that Obamacare would reduce the deficit and cost under $1 trillion over 10 years. The CBO produced a report suggesting the president was right. But that report is flawed: It uses a 10-year window that includes four years of preparation for the law and only six years of its actual implementation.

Shift the 10-year window back one year—three years of preparation, seven years of benefits—and Obamacare’s cost jumps to $1.4 trillion. In fact, the CBO says a full repeal of Obamacare would reduce the budget deficit by $540 billion over the next 10 years.

Obama emphatically promised, “If you like your coverage, you can keep it, no matter what.” That’s not true either. The restrictions on cost-sharing adjustments leave companies and individuals with little flexibility to change plan details without losing their grandfathered status. The administration estimates between 49 percent and 80 percent of small-employer plans, between 34 percent and 67 percent of large-employer plans, and between 40 percent and 67 percent of individual plans will not be grandfathered by 2014.

Rising Premiums

Obama also promised premiums wouldn’t rise under Obamacare. The law, we were told, was going to lower premiums for families by as much as $2,500 a year. The Agency for Healthcare Research and Quality analyzed the ten largest states’ average premiums in 2010. On average, the premiums for a family plan rose 6.5 percent. In my home state of Texas, the average premium for a family plan jumped by more than $1,000.

Ending the rise in health care spending? Before Obamacare was passed, the Centers for Medicare and Medicaid Services estimated national health care spending would rise by 6.1 percent per year over the next decade. After the law passed, its estimates climbed to 6.3 percent per year. Obamacare increases health care spending instead of curbing it.

Since its passage, Obamacare has produced little besides broken promises. It is time to repeal Obamacare and give the nation health care reform that delivers real results.

Spencer Harris ([email protected]) is a policy analyst for the Center for Health Care Policy with the Texas Public Policy Foundation.