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Even with the Subsidies, Obamacare Isn’t Affordable Care

June 04, 2015

Soon the Supreme Court will decide whether the administration broke the law by providing Obamacare subsidies on the federal health insurance exchange. Although the law, as written, is pretty clear—subsidies for state exchanges only—Obamacare’s defenders are urging the Court to turn a blind eye to the law’s text. Turning off the subsidies will cause havoc, they argue. And no doubt, that would be true. But here’s the thing: even with the subsidies, Obamacare is not making health care more affordable. Quite the opposite.

Consider the latest news from CNN: “Obamacare sticker shock: Insurers propose rate hikes for 2016.” All across the country, insurers are proposing double-digit hikes in premiums for Obamacare plans in 2016:

In Florida, for instance, United Healthcare (UNH) wants to raise the rates of plans sold on the Obamacare exchange by an average of 18%. Individual policies available outside the exchange through United Healthcare or through a broker would go up by 31%, on average, with hikes as high as 60% for certain plans in certain locations.

In Texas, insurer Scott & White is looking for a 32% increase for exchange-based plans, while Humana (HUM) is asking for an average 30% boost for its exclusive provider organization policies, which generally cover only in-network services.

And people are taking notice. Reuters reports that many people are forgoing Obamacare policies altogether: “Obamacare is failing at one of its primary goals,” says Beth Pinsker.

Despite the promise of coverage through the US Affordable Care Act (ACA), the number of people applying for noncompliant, short-term health-insurance policies was up more than 100% in 2014, according to new data available from companies that broker these policies. . . .

And the data backs this up: The high cost is the number-one reason people are struggling with Obamacare. The LA Times reports on a recent survey in California:

A new survey shows that 44% of [Obamacare] policyholders find it difficult paying their monthly premiums. . . . And a similar percentage of uninsured Californians say the high cost of coverage is the main reason they go without health insurance.

So it’s not just that people might lose their subsidies. Obamacare itself is making health care way too expensive. Whatever the Supreme Court decides, any real solution would give patients more choices, more control over their health care—and more affordable coverage.