Michael F. Cannon
Democrats and Republicans agree: consumers need relief from rising Obamacare premiums. Help may be on the way, thanks to Kentucky Rep. Vanessa Grossl (R‑Georgetown).
On January 1, Obamacare premiums rose an average of 26 percent for 24 million enrollees and 25 million uninsured who are sitting out Obamacare’s overpriced coverage. I am old enough to remember when President Obama called a 25 percent premium hike that affected fewer than 1 million people “jaw-dropping.”
At the same time, premium subsidies for the wealthy expired. Families of four earning more than $129,000 saw their premium subsidies completely disappear.
Premium subsidies for moderate-income enrollees shrank, exposing them to more of the cost of Obamacare. On average, families of four earning $32,000-$129,000 will go from paying 7 percent to 20 percent of the full Obamacare premium.
And that’s to say nothing about how Obamacare’s preexisting-conditions rules are eroding coverage for the sick.
Relief is available. The nonpartisan Congressional Budget Office finds that Obamacare-exempt plans provide comprehensive coverage, often with “lower deductibles or wider provider networks,” at premiums 60 percent below the lowest-price Obamacare plans. All without Obamacare’s perverse incentives to restrict access to care.
A recent Cato study examines how—when Obamacare threatened affordability and access—both Presidents Obama and Trump removed barriers to Obamacare-exempt plans. Obama, by exempting US territories from Obamacare. Trump, by removing barriers to consumer protections in health plans that Congress exempted from Obamacare. Congress should make both types of relief universal and permanent.
States don’t have to wait for Congress to act. Ever since 2014, residents of US territories have had greater freedom to choose their health plans than other US residents. The only thing that keeps residents of the 50 states from having the same freedom is state regulation.
Today, Kentucky Rep. Vanessa Grossl introduced legislation to remove regulatory barriers to Kentucky residents purchasing Obamacare-exempt health plans available in US territories. Under Grossl’s bill, any health plan that receives regulatory approval from a US territory would be legal in Kentucky. Obamacare would still be available to those who want it.
Many insurers that currently operate in US territories—Aetna, Humana, United Healthcare—already operate and have provider networks in Kentucky. Grossl’s legislation would allow those companies to reduce the number of uninsured Kentuckians by making comprehensive coverage more affordable.
Grossl’s legislation could do so without disrupting Obamacare. As that Cato study shows—and contrary to predictions—during the six years President Trump made Obamacare-exempt plans more widely available, Obamacare enrollment grew, and premiums remained flat. Obamacare premiums spiked only after President Biden rescinded the relief Trump offered.
Grossl’s bill would allow consumers to resolve disputes with those health plans at home, in Kentucky courts, with the help of Kentucky regulators. It would prevent in-state health plans from using taxes, fees, or other assessments to block competition from territorial plans.
“Congress passed the Affordable Care Act,” the legislature tells us, “to improve health insurance markets.” Premium hikes of this magnitude suggest the improvements could themselves use some improvement. All states should eliminate regulatory barriers to purchasing Obamacare-exempt plans available in US territories. Congress should make President Obama’s form of Obamacare relief, as well as the relief President Trump provided, both universal and permanent.