David Frum

03.08.13

ObamaCare's Exchanges Aren't Looking Good

MLADEN ANTONOV/AFP/GettyImages ()

At Investor's Business Daily, Jed Graham notes a depressing new report from the Congressional Budget Office that has a rather unfavorable outlook for the exchanges within ObamaCare. 

Its projections imply that the number of people getting subsidized coverage will ramp up from the 2014 start to peak at 22.3 million in 2018, but then fall by 1.8 million over the next five years.

So we've got a fewer people in the insurance pool, which isn't ideal. Now let's add a dose of higher than anticipated benefits:

CBO projections now not only imply that the subsidized exchange pool will shrink more precipitously, but the average benefit will rise 5.7% a year — faster than the 5% seen last August.

And where's that leave us?

With premium payments growing far faster than income, out-of-pocket costs would soon dwarf the mandate tax penalty capped at 2.5% of income.

CBO's new forecasts suggest more healthy people will opt not to pay an ever-growing chunk of their income, when they can pay a smaller fine and still get the same coverage at a fixed price when they need it, perhaps with a several months delay.

More people who skip coverage will be exempt from the mandate because minimum coverage exceeds the law's affordability threshold, the CBO noted.

Attention Eisenhower conservatives: this might just be your moment to offer reforms to fix ObamaCare. Just maybe.

Instead, we've got Marco Rubio joining Ted Cruz's effort to defund ObamaCare. Can such a push work?

Cruz’s effort is unlikely to make any progress in the Democrat-controlled Senate. But he’s still going to try.

This won't end well.