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ObamaCare falls short for millions

| Friday, July 4, 2014, 8:57 p.m.

To hear administration officials and their supporters in the press tell it, this is a great time for ObamaCare. People who signed up for coverage are actually paying for it; more insurance companies are joining exchanges; some consumers have more choices than originally envisioned.

Not so fast. Yes, ObamaCare is a big help for those now receiving something substantial from the government — large subsidies for the lowest-income Americans who purchase coverage on the exchanges, free health care for people eligible for the expanded Medicaid program. But for millions of other Americans, it's a different story.

Of the much-discussed 8 million Americans who have signed up for ObamaCare, the “vast majority ... are receiving financial assistance,” according to a new Department of Health and Human Services report. What that means is this: Of the 8 million, about 85 percent, or 6.8 million, actually paid for coverage. Of those, about 87 percent, or 5.9 million, receive taxpayer-paid subsidies to help them pay.

“It would appear from this data that it is the lowest income people who are most often signing up for coverage,” writes insurance industry analyst Bob Laszewski.

The problem is, for those who are not eligible for subsidies, or for those eligible only for smaller subsidies, ObamaCare still presents higher premiums, higher deductibles and narrow networks of doctors and hospitals.

“The ObamaCare plans are unattractive to all but the poorest who get the biggest subsidies and the lowest deductibles,” writes Laszewski. “The working class and middle class are not getting access to attractive benefits.”

So they have not purchased coverage. The Democrats who created ObamaCare planned to pressure them into doing so by imposing an individual mandate — a penalty euphemistically called a “shared responsibility fee” — on those who go uninsured.

But now comes word that very few will pay the penalty. In a recent study, the Congressional Budget Office said that of the 30 million people estimated to be uninsured in 2016, only about 4 million will be required to pay. The rest will be exempt from the mandate under various regulations issued by the Obama administration.

So this is one vision of ObamaCare's future: Lower-income Americans purchase insurance because they receive the biggest subsidies. Others with somewhat higher incomes are priced out of the ObamaCare market. The individual mandate is meaningless. The net result is tens of millions remain without coverage. “ObamaCare looks to be on its way to creating a chronically uninsured class,” says Laszewski.

That's certainly not what Barack Obama promised when he said his plan would make health care “better for everybody.”

What happens now? After Democrats finish crowing about what a success ObamaCare is, it's likely they will argue that subsidies must be extended to more and more Americans to pay for coverage that ObamaCare has made more and more expensive. Republicans will resist, but at the same time realize ObamaCare has changed the health care system in ways that will be difficult to overturn and hard to fix.

And for those millions for whom ObamaCare is a bad deal? They're just out of luck.

Byron York is chief political correspondent for The Washington Examiner.

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