In 2010, Congress and the Obama Administration passed the Affordable Care Act (ACA). At the time, its chief supporter, President Obama, argued that the ACA would incentivize hospitals and primary physicians to deliver better health outcomes at lower costs to a greater share of the U.S. population.
As implemented, the ACA demands that companies with more than 49 workers either provide health insurance to all employees working 30 hours or more weekly, or pay a stiff penalty.
The result, businesses have incentive to reduce worker weekly hours below 30. Not surprisingly, since passage of the ACA, the share of all U.S. workers working part-time, but wish to work full-time, has more than doubled.
Regarding cost, the evidence is even more discouraging. At a compound annual rate, health insurance expenditures for individuals and families grew by 6.1% yearly six years before ACA adoption and by a much higher 8.9% annually for the six years after ACA.
But the worst is yet to come. According to Barclays' analysis of rates, the average national health insurance premium will soar by 24.2% for 2017. Arizona will lead the way with an increase of 68.1% with other states not far behind such as Illinois at 43.9%, Iowa at 31%, Florida at 17.7%, Colorado at 20.2%, North Carolina at 20.4% and Pennsylvania at 23.6%.
Likewise, the percentage of counties being served by two or fewer insurers in the federal exchanges will rise to 39% from only 14% this year.
Due to diminished competition among insurance companies, Americans can expect to suffer from even higher growth rates in prices in the years ahead. It may be a bitter pill, but President Bill Clinton's recent statement that the ACA is "the craziest thing in the world" appears to be closer to truth than fiction. Ernie Goss