Spending on health care in the United States continues to increase. For 2022, the last year of complete data, overall spending was $4.4 trillion or 17.3 percent of the country’s gross domestic product. This represented a 4.1 percent increase over the previous year.
One of the main goals of the Affordable Care Act, aka Obamacare, has been to establish health insurance exchanges where Americans can purchase insurance using federal taxpayer premium subsidies. To qualify for these subsidies, purchasers need to prove that they earn between 100 percent and 400 percent of the federal poverty level. For a family of four, 400 percent of the FPL is $124,800 in 2024. Clearly, the exchanges are not a safety net but instead a means of redistribution of wealth into the economic middle class in the U.S.
No surprise, as health care costs have risen, so have health insurance premiums. For example, a recent report indicates that premiums in the Washington state exchange have increased on average by 11 percent. Washington state is not alone. On average, premiums nationally for 2024 increased by six percent throughout the Obamacare exchanges in all 50 states.
Enrollees, however, will not necessarily see these increased costs. The American Rescue Plan of 2021 provided for enhanced subsidies, which were extended through 2025 by the misnamed Inflation Reduction Act.
This means as health care costs and insurance premiums increase, enrollees do not necessarily see these increases. Private insurance companies are financially covered by these premium increases because of the enhanced subsidies. Federal taxpayers, however, are the losers.
Some continue to push for the U.S. to move closer to a single-payer, government-controlled health care system, especially through the expanded use of Medicare, Medicaid, and now Obamacare. Taxpayers already know how this story will end if the government continues to position itself as the solution, instead of realizing it is part of the problem.