National Center for Public Policy Research press release


For Release: October 1, 2013
Contact:
Judy Kent at (703) 759-7476 or [email protected] or David Almasi at (202) 543-4110 x11 or (703) 568-4727 or [email protected]

 

ObamaCare Exchanges Doomed To Fail, Says Health Care Policy Analyst With the National Center For Public Policy Research

"The exchanges will result in a death spiral. They'll attract the older and sicker while discouraging the younger and healthier, resulting in constantly rising insurance prices," says Dr. David Hogberg

Glitches in the Exchanges' Websites Will Only Exacerbate the Death Spiral

 

Washington, D.C. - "Today begins the unfolding of another ObamaCare failure," says Dr. David Hogberg of the opening day of the ObamaCare exchanges.

Dr. Hogberg, senior fellow for health care policy at the National Center For Public Policy Research, is available today and the rest of the week to offer comments for reporters and radio hosts covering the opening of the exchanges.

Hogberg has written two recent policy studies about the exchanges.

The first, entitled "Why The 'Young Invincibles' Won't Participate In The ObamaCare Exchanges And Why It Matters," examines the financial incentives those ages 18-34 have to avoid buying insurance on the exchanges. Hogberg calculates that over 3.7 million single 18-to-34-year olds would save at least $500 by forgoing insurance and paying the individual mandate fine.

The second, co-written with Sean Parnell, entitled "ObamaCare Exchanges: Just Because You Are Eligible For a Subsidy Doesn't Mean You Will Qualify For One," examines whether those age 18-34 will be eligible for exchange subsidies. Although people making under 400 percent of the federal poverty level ($45,960) are eligible for a subsidy on the exchange, Hogberg and Parnell found that in most exchanges the subsidies disappear before those age 18-34 even reach 300 percent FPL ($34,500).

Dr. Hogberg's studies have recently been cited in USA Today, Investor's Business Daily, The Daily Caller, the Des Moines Register, The Washington Free Beacon, The Weekly Standard, The Colorado Springs Gazette, and The Motley Fool, among many others.

He was interviewed on Fox News Channel's "Special Report" on September 30 and has been a guest on countless radio programs about his work on the exchanges.

"The exchanges are going to end up in a 'death spiral,'" explains Hogberg. "Not enough young and healthy will sign up, leaving the insurance pool older and sicker. That will cause prices to rise, more young and healthy to drop out, and the pool to become older and sicker still, causing prices to rise. This process repeats itself until you have an insurance pool that is very expensive to cover and prices that largely appeal to those who are older and sicker."

Today the American Spectator is scheduled to publish an article by Hogberg examining what impact the "glitches" in the ObamaCare exchanges' websites may have. According to Hogberg:

Among those eligible for the exchange, those ages 18-34 are probably the most web savvy. Thus, they are the most likely to be accustomed the convenience of websites like Amazon.com. Their patience for the exchanges will quickly run thin should they log on to the exchange websites and find it difficult to learn the price of their insurance, to find out how much in subsidies they qualify for (if any), and to enroll. Such frustration will make it less likely they will sign up.

On the flip side, who is most likely to endure the difficulties of exchange websites? If the exchange websites initially prove unworkable, who is most likely to return weeks or months later when the websites may be functional? They will be the people who see the most benefit in having insurance -- namely, those with health problems. The technology glitches add to the exchanges' system of incentives that discourage young and health people and make buying insurance appealing largely to those with high health care costs.

David Hogberg, Ph.D., is a health care policy analyst for the National Center for Public Policy Research. Previously, Dr. Hogberg was a Washington Correspondent for Investor's Business Daily, specializing in health care and Medicare. Prior to his employment at IBD, he worked as a policy analyst studying health care and other issues for various think-tanks, including the National Center for Public Policy Research, and for the office of U.S. Representative Jeff Fortenberry. Dr. Hogberg holds a Ph.D. in political science from the University of Iowa. He is currently working on a book entitled "Medicare's Victims: How The U.S. Government's Largest Health Care System Harms Patients And Impairs Physicians."

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than 4 percent from foundations, and less than 2 percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.

Contributions to The National Center are tax-deductible and greatly appreciated.

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