BY TYLER DURDEN
MONDAY, JUL 10, 2023 – 05:40 PM
Biden’s efforts to produce more inflation are nonstop, 24×7.
His latest move is a set of regulations to force people into Obamacare despite the fact a District Court already ruled against his proposed regulations.
Biden Attempts to Make Healthcare Even More Expensive
To understand what Biden wants to do, and why the Supreme Court is likely to smack it down, we need to review a District Court ruling from 2020.
On July 24, 2020, CATO reported In a Win for Consumers, a Court Ruling Affirms the Legality of Short‐Term Health Insurance Plans
The ACA dramatically increased health insurance premiums in the “individual” market, where consumers purchase coverage directly from insurers. Yet Congress deliberately chose not to apply the ACA’s regulations to “short‐term, limited duration insurance,” which can therefore offer lower premiums. As ACA premiums rose, many consumers flocked to STLDI plans.
One such consumer was 61‐year‐old Arizona resident Jeanne Balvin. In 2017, Balvin purchased an STLDI plan from UnitedHealthcare for $274 per month. It covered the entire cost of her emergency surgery for diverticulitis, minus a $2,500 deductible. Had she purchased an ACA plan, her premium would have been three times as high and her deductible in the range of $6,000.
Prior to 2016, Balvin could have purchased an STLDI plan that lasted an entire year. In the hope of forcing people into ACA plans, however, the Obama administration imposed a rule in 2016 that required insurers to throw STLDI enrollees out of their plans after just three months. The Trump administration reversed this rule and expressly stated that nothing in federal law prevents insurers from making STLDI plans from offering renewable, and therefore continuous, coverage.
Enter the Association for Community Affiliated Plans, a lobbying group representing private insurance companies that sell ACA plans. Complaining that STLDI plans were cutting into their business, ACAP asked federal courts to remedy that “injury” by reinstating this heartless rule.
On July 17, a divided panel of the U.S. Court of Appeals for the D.C. Circuit ruled in favor of STLDI enrollees. The court found the administration’s reversal of the Obama rule was reasonable, not least because stripping coverage from these patients means they “could be denied a new policy ‘based on preexisting medical conditions.’”
Jam City, Dateline July 7, 2023
Behold the President’s plan to limit short-term health insurance plans in order to jam more consumers into the heavily subsidized and regulated ObamaCare exchanges. The Health and Human Services, Labor and Treasury Departments on Friday proposed rules to roll back the Trump Administration’s expansion of short-term, limited-duration insurance (STLDI) plans. Since 2018 these plans have been available in 12-month increments, and consumers have been able to renew them for up to 36 months.
These plans are especially attractive to young people whose employers don’t provide coverage. Why would a healthy 26-year-old want to pay for maternity, pediatric and other services he probably won’t use in the near future?
The Inflation Reduction Act sweetened ObamaCare’s insurance premium tax credits that are tied to income. As a result, a 60-year-old making just above four times the poverty level has to pay only 8.5% of his income toward his insurance premium while the government picks up the rest. If premiums increase, government is on the hook for more.
But after the Inflation Reduction Act’s enhanced subsidies expire in 2025, consumers will be in for sticker-shock. Hence, the Administration is trying to drive more young, healthy people back into the exchanges by reinstating a four-month cap on short-term plans and prohibiting renewals. Presto: A free market for insurance that competes with the ObamaCare exchanges disappears.
As with his backdoor ban on gas-powered cars, President Biden is limiting health insurance choice and competition in the name of protecting consumers from something they want to buy.
Obamacare is Junk
On June 29, 2023, before the above details emerged, CATO wrote Dear Health Reporters: Prep for Biden’s Proposed Rule on Short‐Term Plans
First of all, ObamaCare is junk coverage here. Economic research shows ObamaCare’s preexisting‐conditions “protections” have eroded coverage at a cost to sick patients of thousands of dollars per year, and even “currently healthy consumers cannot be adequately insured.” ObamaCare has caused individual‐market provider networks to narrow significantly since 2013, when network breadth reflected consumer preferences. ObamaCare premiums are skyrocketing to the point where Congress is offering subsidies to households earning $600,000 per year. STLDI plans offer more flexibility and choice, protect conscience rights, offer broader provider networks, cost up to 70 percent less than ObamaCare plans, and can even reduce ObamaCare premiums by improving ObamaCare’s risk pools.
If Biden tries to eliminate standalone renewal guarantees, he may trigger a lawsuit. The Public Health Service Act grants the federal government no authority at all to regulate those novel insurance products.
13 Years of Obamacare
On March 30, 2023, the Washington Examiner reported Thirteen years of Obamacare Increasing Healthcare Costs.
The Affordable Care Act turned 13 last week, and I was asked to provide testimony before the House Committee on Ways and Means on how the law, as well as several recent expansions of it, failed to make healthcare more affordable. Here is a slightly modified version of what I told Congress.
The ACA has caused premiums to soar. Individual market premiums more than doubled in the first four years after its implementation, yet plans covered fewer doctors and hospitals. By 2021, the average ACA plan premium plus deductible for a family of four was about $25,000.
Since coverage is cost prohibitive, most enrollees need extremely large subsidies to afford these plans. Taxpayers pay for more than 80% of the premium on average and pick up almost all the cost of premium increases over time. This gives insurers significant pricing power and in turn leads to higher premiums — an inflationary spiral.
As government’s role in healthcare has expanded, prices have skyrocketed. Hospital prices have increased more than any other major economic sector, rising three times faster than inflation since 2000.
Both the American Rescue Plan Act and the Inflation Reduction Act expanded the ACA’s already substantial subsidies. Most of the benefits went to people who already had coverage . Families with incomes well above $250,000 now qualify for large subsidies. The expanded subsidies incentivize employers to drop workplace coverage, raising government’s overall deficits. And all the new spending on the expanded subsidies also increases inflation.
The Supreme Court is guaranteed to strike down this latest bit of regulatory overreach by the Biden administration.
Here are some recent Supreme Court smackdowns.
- June 29, 2023: Supreme Court Rules Race-Conscious Admissions at Harvard and UNC are Unconstitutional
- June 30, 2023: Supreme Court Strikes Down Student Debt Cancellation, Cites Nancy Pelosi
- July 2, 2023: The Wealth Tax Idea Is Headed for Sudden Death in the Supreme Court
Don’t expect any relief from nonsensical proposals. By now, it should be clear Biden’s regulatory madness is endless.
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