State of the Union Post Mortem: Obamacare Not as Rosy as He Claimed in His Speech

During his last State of the Union address, President Obama hardly mentioned the Affordable Care Act. He did not mention the 7 million new Medicaid enrollees, many of which cannot find a doctor willing to treat them for Medicaid’s paltry fees. The president did not talk about the 9 million to 11 million Americans with coverage through the state and federal health insurance exchanges.  Nor did he mention enrollment is only about half what the Congressional Budget Office projected would enroll only a few years ago.

Here is what he did say “… the Affordable Care Act is all about… filling the gaps in employer-based care… so when you lose a job, or you go back to school or you strike out and launch that new business you’ll still have coverage.”

This all sounds well and good. But it’s more rhetoric than reality.

Unemployed: The reality is many people losing their job would not qualify for a subsidy because their most recent tax return would likely show income too high to qualify for a subsidy. After losing a job, the unemployed would have to be out of work for a year or more before they would qualify for a subsidy. In other words, they are likely no better off than they would be under COBRA.

Students: Unless they are middle-aged returning students with preexisting conditions, it’s likely a young person returning to school could have bought limited benefit coverage from their university much cheaper prior to Obamacare.

Entrepreneurs: As far as people who want to launch a business, they’d likely be better off without a mandate that forces them to have coverage or pay a fine. They would be better off with affordable pre-Obamacare coverage than the high-priced, mandated coverage now available. My wife launched her consulting business years ago. Her health coverage is now much more expensive (and her benefits lower) than ever before. If anything, Obamacare is driving would-be entrepreneurs to stay with employers.

Conclusion: The federal and state health insurance exchanges are suffering adverse selection as healthy people shun the costly premiums because the plans meet little of their medical needs. The next Administration will have to reform the ACA with more flexible coverage and allow consumers to exercise cost-control measures in ways that truly make health insurance affordable.

This post has been updated from an earlier version posted January 12 prior to the State of the Union speech.

Comments (8)

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  1. The big ham says:

    Why a has changed in 30 years?

  2. John Fembup says:

    Actually, Devon . . . I think I would agree that ACA is Obama’s greatest achievement.

  3. The big ham says:

    Watched the same episode in 2002

    • Ron Greiner says:

      big ham, my father-in-law was a hospital administrator and he said that we don’t want to find a cure for cancer because cancer is a big money maker.

      That was before his mental problems. For the last 10 years of his life if he went outside he couldn’t tell which house to go back into.

      I thought the Obamacare tax credits were based on the individual’s projected earnings in the future and not what they earned in the last year.

    • Devon Herrick says:

      I forgot to mention President Obama announced Vice President Joe Biden will assume the role of Cancer Czar to finally cure cancer once and for all – all in the next 12 months.

      This reminds me of an article from The Onion. This links to an article about our
      Shirtless Cancer Czar Washing His Trans Am in the White House Driveway.

  4. The big ham says:

    The President said the economy has never been stronger. The CBO says not so fast my friend.

  5. The big ham says:

    You are confused ron ! Just because the law says credits are based off projected earnings dosent mean that’s what the gov. Will follow. The law haven’t been followed since, well it was written.

    • Ron Greiner says:

      big ham,

      Did you know that the other insurance companies are following TIME and United Health Care’s lead and terminating agent commissions?

      Why pay agent commissions when the government will have navigators, who are trained never to answer a question, enroll people for FREE!

      Navigator School 101: Your only job is to never answer a question because you are not licensed, got it?

      I wonder how good these navigators are at customer service when the consumer need help. That’s a good one.