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How's Obamacare Turning Out? Great If You Live in a Blue State, and 'Screw You' If You Have a Republican Governor

Coverage for uninsured is cheaper than expected for millions, but red-state residents in poverty are facing pain.
 
 
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Obamacare implementation is becoming the latest dividing line between blue- and red-state America, with Democrat-led states making progress to expand healthcare to the uninsured and the poor—and Republican-led states saying "screw you" to millions of their most vulnerable and needy residents.

The latest sign of the Republican Party’s increasingly secessionist tendencies comes as Obamacare passed a major milestone in California, which late last week announced lower-than-expected healthcare premiums for its 5.3 million uninsured, less than many small businesses now pay in group plans.

“Covered California’s Silver Plan… offers premiums that can be 29 percent lower than comparable plans provided on today’s small group market,” the state’s new insurance exchange announced Thursday, referring to the least-expensive option of four state-administered plans and posting this price comparison chart.

In contrast, the refusal by red-state America to create these health exchanges, which would be more local control—a supposed Republican value—and to accept federal funds to expand state-run Medicaid programs for the poor, means that about half the states are turning their backs on their residents, especially millions of the poorest people.

The federal government plans to step in later this summer and offer uninsured people in recalcitrant red states the option of buying plans via federally run heath care exchanges. But the poorest people can’t afford that, meaning the refusal to expand Medicaid programs will leave them in the cold. They will see ads selling new federal healthcare options that will be unaffordable for them.

TheNew York Times reports that local healthcare advocates in red states are predicting a backlash once Obamacare is rolled out and the poor realize that they cannot take advantage of it because Republicans are blocking it. However, that does not change the bottom line in state-run Medicaid programs: the GOP is again penalizing the poor.

Progress in Blue States

Meanwhile, in blue states, there have been surprising developments in the cost of Obamacare for those people who currently are uninsured. There, the bottom line is insurance premiums are hundreds of dollars a month lower than what employers are now paying for their workers under existing group plans.

California, with 5.3 million uninsured adults, is the biggest state to release cost estimates for Obamacare. Its lower-than-expected estimates are in line with announcements in Washington, Oregon, Maryland and Vermont. The actual prices will be known after insurers file rate documents in coming weeks.

These estimates are a bright spot in what’s otherwise been a season of dire and all-too-partisan predictions about Obamacare implementation. Even without the political smears, there still are plenty of unknowns about the law, including in the blue states where it is on track. The biggest concern is how will it affect current healthcare costs across the economic spectrum, as the law is designed to cost less for people and small businesses via tax credits to offset its expense. This chart shows how it is expected to affect various age and income groups.

Unlike the red-state retreat from taking responsibility for its residents, California has taken an aggressive approach to building benefit plans. Its new insurance exchange told insurers what coverage their plans had to include, prompting some of the largest national health insurance companies to skip the Obamacare rollout. However, enough firms are participating to offer real options.

As important, California is one of 15 states where its insurance regulators cannot reject premium increases. That means the companies can jack up prices with impunity, even if the public protests. “As important as this progress [on cost estimates] is, there’s still more work to be done,” said Dave Jones, California Insurance Commissioner. “I remain very concerned that there is no legal authority to reject unreasonable and excessive rate hikes.”