Headline: "Exchanges Struggle to Enroll Consumers As Income Increases" It's Because of the Obamacare Dichotomy

Here is an excerpt from a post on this blog from June 21, 2014:

Kaiser Family Foundation Survey Finds Most People Who Bought Health Insurance on the Exchanges Are Happy With It

This week the administration reported that 76% of those who received a subsidy paid less than the full premium for the plans they selected. And, 69% are paying less than $100 after the subsidies––46% are paying $50 or less.

It would appear from this data that it is the lowest income people who are most often signing up for coverage. They are the ones who get the biggest premium subsidies as well as the reductions in their deductibles and co-pays.

So, the Kaiser Family Foundation has found that these people who are having their premiums and deductibles disproportionately subsidized are happy with their coverage. Hardly a surprise. If you paid for most of my insurance and cut my deductibles from the standard levels I'd be pretty happy too.

My sense has always been that Obamacare appeals to people very differently depending on their incomes. I will call it the Obamacare dichotomy: Poorer people get by far the lowest premiums and deductibles from Obamacare and working class/middle class/wealthier people, who pay very high premiums for high deductible plans, get relatively very little from it.

Why do most people express dissatisfaction with Obamacare in most of the polls? Why did Obamacare fare so badly in the last election? It seems to me that all of this has to do with who benefits and who does not.

This week consulting firm Avalere found the same enrollment breakdown I pointed to last June between the poor and the middle class after analyzing the most recent enrollment reports from the government:

The New York Times: Has Obamacare Enrollment Stalled?

Readers of this blog know that I have made a number of points about Obamacare in recent months:

• The number of people signing up for Obamacare is well below the level necessary to make the rates stable over the long-term––the longstanding insurance industry standard calls for getting 75% of an eligible group in order to have enough healthy people in the pool to pay the costs of the sick people. I have reported to you that less than half of the subsidy eligible have signed up so far.
• The Obama administration's enrollment estimates, that they now use to celebrate their 2015 enrollment results, were low ball estimates that aren't close to the kind of enrollment they need to make the program both politically and financially sustainable.
• Obamacare's overall enrollment is coming up way short of original projections and has slowed down considerably in the most recent second open enrollment.

In the face of these comments you have likely noted any number of press reports in the past weeks pointing out just how well Obamacare has been doing.

But now none other than the New York Times has picked up the same themes I have been talking about for months.

The Obamacare Supreme Court Subsidy Challenge––Surprising Comments From Anthony Kennedy and Maybe a Way Out for John Roberts

The Supreme Court heard oral arguments yesterday in the King v. Burwell case that would throw out the Obamacare subsidies for millions of people now receiving them in the federally run health insurance exchanges.

It sure sounded like perennial swing vote Justice Anthony Kennedy is ready to save the subsidies and Obamacare given his comments suggesting a finding for the plaintiffs would end up coercing the states into building an insurance exchange––something that would present Kennedy with a "serious constitutional problem."

But I was also struck by this line in a Washington Post article about the oral arguments: "More than the other justices, Kennedy is the one most likely to think out loud during oral arguments, trying out various theories and posing quandaries for lawyers."

Translated: It ain't over til it's over.

At one point, conservative Justice Samuel Alito asked if perhaps the Court could delay the effect of a ruling ending the subsidies thereby giving the Congress and the states time to remedy the fallout.

Republicans: "We Have a Plan For Fixing Health Care" If the Supreme Court Eliminates Subsidies in as Many as 37 States––It Won't Be So Simple

Key Senate Republican committee chairman Orrin Hatch (UT), John Barrasso (WY), and Lamar Alexander (TN) have an op-ed in the Washington Post today saying they have a plan if millions of Americans lose their Obamacare subsidies this summer.

First, I have no idea how the Court will rule, likely in late June. While it is hard for me to see Chief Justice John Roberts voting to strike a major blow to the new health law now when he had that same chance three years ago and didn't, no one can predict what is going to happen this time.

But if the Court does throw the subsidies out in late June, it will mean that the Obamacare insurance subsidies would no longer be available to millions in as many as 37 federally-run states come August 1.

Realizing just what chaos this would cause, these three senators wrote:

First and most important: We would provide financial assistance to help Americans keep the coverage they picked for a transitional period. It would be unfair to allow families to lose their coverage, particularly in the middle of the year.

They provided no more detail except to say that they have had discussions with House and Senate colleagues and that there is "a great deal of fconsensus on how to proceed."

I don't doubt their intentions, but it would be nowhere so easy.