Ever wonder how politicians and bureaucrats can go out and deliver the same misleading propaganda to various media outlets each day and keep a straight face while doing it? Are these folks so detached from the real world that they go back to the "safe space" of their offices in Washington D.C. and pat themselves on the back thinking they've actually duped the American people into believing some alternate set of facts that have no basis in reality? Or, are they so immersed in the false narratives day in and day out that they actually start to believe their own rhetoric?
No matter the reason, one narrative we've found particularly misleading this week comes to us courtesy of Marjorie Connolly, of the Department of Health and Human Services, who has the brutally difficult job of defending the "success" of Obamacare as it literally on the verge of collapse from soaring premiums and declining insurer participation. While we certainly don't envy the position of Connolly, we do find some of her comments to the press "slightly" misinformed.
Just to provide an illustrative sample:
Reuters (8/2/16) - "Consumers coming back to shop for 2017 will continue to have a robust set of choices."
New York Times (8/19/16) - “A number of steps remain before the full picture of marketplace competition and prices are known. Regardless, we remain confident that the majority of marketplace consumers will have multiple choices and will be able to select a plan for less than $75 per month when Open Enrollment begins Nov. 1.”
The Tennessean (8/25/16) - “Consumers in Tennessee will continue to have affordable coverage options in 2017. Last year, the average monthly premium for people with Marketplace coverage getting tax credits increased just $2, from $102 to $104 per month, despite headlines suggesting double digit increases.”
As you can see, the chosen narrative of Connolly is to focus on the premiums paid by the overwhelming minority of healthcare consumers that actually receive subsidized rates under Obamacare. While this may be the only "convenient" fact that Connolly could find to peddle, it ignores the skyrocketing rates that the other 95% of people, mostly middle-class Americans, have to pay.
So, here's the real math. There are roughly 320mm people in the United States. 120mm people are covered under Medicare and Medicaid which leaves 200mm to be covered by "private" health insurance plans. In 2016, roughly 11.1mm people signed up for "private" health insurance through one of the Obamacare federal or state exchanges. Of those people, it is estimated that roughly 85%, or ~9.5mm people, received some level of "need-based" subsidy . News flash Department of Health and Human Services, 9.5mm people is less than 5% of the 200mm people seeking private health insurance. The other 95% is America's middle class and they're getting crushed.
As for Connolly's suggestion that consumers will continue to have "robust" choices in 2017...we're not sure that people in the majority of the Southeast and Midwest with only 1 "option" for 2017 would agree.
And, as for premiums...we're not sure that a 21% YoY median increase is necessarily "affordable."
The fact is, the overwhelming majority of the 95% we mention above is comprised of middle-class consumers who are bearing the brunt of the burden of rising health insurance costs. In fact, a June Brookings Institution study found that middle-income households now devote the largest share of their spending to health care ever, 8.9%, a rise of more than three percentage points from 1984 to 2014. Per the Wall Street Journal, since 2007 middle-class families have been forced to increase the share of their overall spending on healthcare by nearly 25% while cutting back massively on other necessities to cover the difference.
So here in one simple chart is why President Obama's Affordable Care Tax is crushing the middle-class more than any other social strata...
So, for those wondering why the "recovery" from the "great recession" has been so muted perhaps you need to look no further than the massive healthcare tax imposed on the middle class by Obamacare.