Premiums are rising and deductibles are growing – under Bushcare
Remember Bushcare? It was enacted by Congress in the form of the Medicare Modernization Act in 2003. That law added a prescription drug benefit to Medicare as part of the largest expansion of the program in its history with a projected cost over ten years of close to $1 trillion. And the law passed almost completely along party lines.
Remember Bushcare? It was enacted by Congress in the form of the Medicare Modernization Act in 2003. That law added a prescription drug benefit to Medicare as part of the largest expansion of the program in its history with a projected cost over ten years of close to $1 trillion. And the law, strongly supported by President George W. Bush, passed almost completely along party lines.
By way of reminder, under Bushcare, beneficiaries select a coverage plan on an online marketplace in each region with large subsidies for those with lower incomes and a financial penalty for those who choose to go without coverage. Beneficiaries can only change their plan at the end of each year during an open enrollment period.
Perhaps, this law reminds you of another massive federal health care program supported by a different president.
Critics warned that premiums under Bushcare would remain under control only if enough plans competed in the marketplaces. It looks like they may have been right.
The number of plans competing on the Bushcare marketplaces will be 11% lower nationwide in the coming year, and it will reach the lowest total since the program went into effect. For lower-income beneficiaries, the number of plans available at no cost after the subsidy has also fallen. And along with the decrease in competition there will be an increase in premiums. Eighty-three percent of beneficiaries will see a rise next year, and it will be substantial for many.
At the same time, the standard deductible under Bushcare will rise by $40, the largest increase ever, and networks of providers will shrink. Eighty-five percent of plans now steer beneficiaries to preferred pharmacies, up from 7% in 2011.
This scenario may also remind you of that other government program, which is, of course, the Affordable Care Act, aka Obamacare.
Like Bushcare, the ACA relies on competition between insurers to keep premiums in check on the marketplaces. And less competition has meant larger premium hikes, along with increases in deductibles and narrower provider networks.
When opponents criticize Obamacare for rising premiums and skimpier coverage, they might remember that the program's structure is far from unique. These concerns apply in remarkably similar ways to health reform laws implemented by both political parties.
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