Private Insurance Declined During the Obama Years, Despite $341 Billion in Subsidies

For Immediate Release:
September 10, 2018
Contact: Dave Mohel

(703) 347-9454

The percent of the population with private health insurance actually declined during the eight years of the Obama presidency, according to a new study produced by the Goodman Institute.

Yet subsidies for individual buyers have exceeded $100 billion a year – theoretically enough to insure an additional 20 million adults.

“A main goal of Obamacare was to make sure everyone not eligible for a government program had access to affordable private coverage,” said Linda Gorman, a health economist who authored the study.

“Employers are required to provide insurance; until next year, individuals are required to buy it; and low and moderate income families qualify for generous subsides,” she said. “Clearly, something isn’t working.”

The study concludes that the percent of the population with private coverage was lower in 2016 (69%), the last year of Barack Obama’s presidency, than it was in 2008 (69.6%), the year he was elected.

“What makes this finding so surprising is that Barrack Obama came into office in the middle of the Great Recession. Unemployment was at a post war high and when people lose jobs, they tend to lose health coverage as well. Today, with unemployment at rock bottom the number of people with private insurance should be much higher than it currently is – even without Obamacare.”

The study says an increase in the number who buy their own insurance has been more than offset by a decline in employer-provided coverage.

“Obamacare may be causing employers to drop coverage,” said Gorman. “The law encourages companies to substitute part-time work for full-time and to outsource work to independent contractors in order to avoid Obamacare’s employer mandate.”

The law also allows employers to charge the employees a premium equal to 9.5% of wages, impose a deductible of $7,350 (individual) or $14,700 (family) and ask the employee to pay the full premium for any dependents. Reports from the fast food industry suggest that more than 90% of employees turn these offers down.

Another problem is that people who don’t get a subsidy are getting priced out of the market for individual insurance. A Treasury Department document points to an “alarming” 20 percent decline last year in the number of people who are enrolled in the individual market and not getting subsidies (e.g., an individual earning more than $48,160). In some states, the decline was even worse, with enrollment dropping by more than 40 percent in six states, including a 73 percent decline in Arizona.

The study says the increase in the number of people with health insurance under Obamacare is entirely due to Medicaid expansion. Even with that, 28.3 million Americans were uninsured as of the first quarter of 2018.