The Department of Health and Human Services recently made news with a report that “national uninsured rate will reach an all-time low in early 2022.” Sounds exciting, but look under the covers and what you find is a quiet but massive shift from private to government-funded coverage.
HHS estimates that there will be 5.2 million fewer uninsured Americans than in 2020. Yet Medicaid rolls have grown by 24 million during the pandemic — a 34% increase — while two million more adults have enrolled in ObamaCare exchange plans.
Why are so many people on Medicaid when America’s unemployment rate is near record lows? A big part of the answer: Starting in March 2020, the Families First Coronavirus Relief Act prevents states from removing ineligible people from their Medicaid rolls for the duration of a public-health emergency in exchange for a bump in federal funding.
If not for Mr. Biden’s repeated emergency declarations, nearly 20 million Medicaid enrollees would no longer qualify, mostly because their incomes exceed the threshold for eligibility. Many can now get coverage through their employers, but why pay insurance premiums when Medicaid is “free”?
Thus taxpayers are left with a large surprise medical bill. Annual Medicaid spending has increased by $198 billion during the pandemic. That’s about as much as Medicaid spending increased in the first seven years of the Obamacare expansion, from 2012 to 2019. As long as the Biden administration continues to declare a public-health emergency—now set to expire on Oct. 13—taxpayers’ Medicaid tab will continue to grow. And what are the odds that the administration won’t renew the state of emergency before the election?
Another explanation for the government insurance takeover is the extension of Obamacare exchange subsidies in March 2021 by Democrats. As a result, millions of Americans pay no premiums, and families making more than 400% of the poverty line receive generous subsidies. The Congressional Budget Office initially estimated that the two-year subsidy extension would cost $22 billion. Actual cost: $50 billion.
More Americans enrolled in the exchanges than the CBO estimated, and insurers have taken advantage of the sweet subsidies by raising premiums. Yet the CBO oddly predicts that the Schumer-Manchin bill’s three-year subsidy extension would cost only $33 billion.
How does CBO estimate that subsidies in three years will be 34% lower than in two years? Maybe it expects health care spending to drop as the pandemic subsides, but insurers are now raising premiums to cover Covid treatments they hope the feds will stop paying for.
By the way, CBO doesn’t account for the administration’s proposed rule to fix Obamacare’s so-called family problem, which would have limited exchange eligibility for many people who offered family coverage through their employer. The administration estimates that the change could allow up to five million more Americans to qualify for more generous subsidies in the Obamacare exchanges currently with access to employer coverage.
The administration seems to want to move more people into Medicaid and the tightly regulated Obamacare plans, and thus make more Americans dependent on the government for health care. The government also subsidizes employer coverage through the health care tax deduction, but it is much less expensive for taxpayers.
Annual Medicaid and Obamacare spending has risen by nearly $230 billion during the pandemic, reaching $44,000 per newly insured American. Alas, taxpayers cannot challenge this overcharge.
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