Other editors: The Hidden Government Takeover of Health Insurance

The Department of Health and Human Services recently made news with a report noting that “National Uninsured Rate Hits Record Low in Early 2022.” Sounds encouraging, but look under the covers and you’ll find a quiet but huge shift from private to government-subsidized coverage.

HHS estimates there are 5.2 million fewer uninsured Americans than in 2020. Yet Medicaid enrollments during the pandemic have grown by 24 million — a 34 percent increase — while two million more adults have enrolled in plans for ObamaCare exchanges.

Why are so many more people on Medicaid when the US unemployment rate has reached a near record low? Much of the answer: The Families First coronavirus relief act of March 2020 prohibited states from removing people who become ineligible from their Medicaid rolls for the duration of the public health emergency in exchange for increased federal funding.

If it weren’t for Mr. Biden’s repeated emergency declaration, about 20 million Medicaid enrollees would no longer be eligible, most because their incomes exceed the eligibility threshold. Many could already get coverage through their employers, but why pay insurance premiums when Medicaid is “free”?

Thus, taxpayers are hit with a huge surprise medical bill. Annual Medicaid spending increased by $198 billion during the pandemic. That’s about as much as Medicaid spending rose from 2012 to 2019 in the first seven years of the ObamaCare expansion. As the Biden administration continues the public health emergency — which is now set to end on October 13 — the taxpayer’s Medicaid tab will continue to grow. And what are the chances that the administration won’t renew the state of emergency again before the election?

The other explanation for the public insurance takeover is the Democrats’ expansion of ObamaCare exchange subsidies in March 2021. As a result, millions of Americans pay no premiums and households above 400% of the poverty line receive generous subsidies. The Congressional Budget Office initially estimated that the two-year extension of the subsidy would cost $22 billion. Real cost: $50 billion.

More Americans enrolled in the exchanges than the CBO predicted, and insurers took advantage of the sweetened subsidies by raising premiums. Yet the CBO oddly projected that the three-year subsidy extension under the Schumer-Manchin bill would cost only $33 billion.

How does CBO estimate that three years of subsidies will cost 34% less than two years? He may have expected health care costs to decline as the pandemic eased, but insurers are now raising premiums to cover Covid treatments they expect the feds to stop paying for.

Incidentally, CBO does not account for the administration’s proposed regulation to fix ObamaCare’s so-called family problem, which limits the exchange eligibility of many individuals offering family coverage through their employers. The administration estimates the change could make an additional five million Americans who currently have access to employer coverage eligible for more generous subsidies on the ObamaCare exchanges.

The administration appears to want to draw more people into Medicaid and the heavily regulated ObamaCare plans, and thereby make more Americans dependent on the government for health care. The government also subsidizes employer coverage through the health tax deduction, but it’s significantly less expensive for taxpayers.

Annual spending on Medicaid and ObamaCare increased by about $230 billion during the pandemic, amounting to about $44,000 per newly insured American. Alas, taxpayers can’t dispute this markup.

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