Yesterday the Obama administration confirmed what many Americans already knew: the monetary pressures imposed by Obamacare on the middle class are becoming unmanageable as a result of the average Obamacare premium set to spike by 25%, or hundreds of dollars of formerly disposable income that will be redirected to what is effectively a tax. However, in some states – especially those where the so-called recovery has failed to keep pace – such as Pennsylvania, the sticker shock will be far greater.
As CBS Philadelphia reports, when the Affordable Care Act open enrollment period begins next week customers will see some changes, including fewer choices and higher prices. In Pennsylvania, the number of insurers in the marketplace has gone from 13 to eight.
But the worst fate is set to befall the city that famously booed Santa Claus, Philadelphia, where CBS reports that just two insurers are left and premiums are expected to rise 53%.
Aviva Aron-Dine of Health and Human Services says the size of the hike reflects artificially low rates early on. Pennsylvania had among the lowest rates in the nation. “Issuers were pricing for a completely new market, one where they could no longer exclude those with the most serious health needs,” she said, “many set prices that turned out to be too low.”
To be sure, the administration had to spin this dramatic surge in a way that does not upset the locals, and did just that when Aron-Dine said that “the plans are still affordable, since three-quarters of Pennsylvanians qualify for tax credits.”
“Not only do tax credits bring down the cost of coverage, they adjust dollar for dollar with the cost of the benchmark plan in your area,” she explained. “So even if the cost of benchmark coverage goes up, most consumers will not have to pay more. Aron-Dine claims costs could even go down if consumers take the time to shop for a cheaper plan. She says new features on the healthcare.gov website will make that easier to do.
It remains to be seen if any of the locals will accept this rationalization for soaring prices when they start getting invoices demanding hundreds of dollars more each month. As a reminder, Pennsylvania is one of the critical swing states which in recent weeks has been polling in Hillary Clinton’s favor: it just may be that this “sticker shock” will flip the tables once again.