Now that 2013 is drawing to a close, we see why Obamacare’s drafters did what they did. Obama’s approval ratings are at or near all-time lows, but that matters little to a White House that already won four more years. And while Republicans have directed the public’s attention toward Obamacare’s woes, their failure to win the White House or a Senate majority in 2012 means that outright repeal of the law remains a pipe dream for now.
Unfortunately for Obamacare’s supporters, the story doesn’t end there. Nor do the political ramifications for Democrats. It may be that 2014 is an even rougher year for the ACA than 2013 was, and I think that will be the crucial reason Republicans regain control of the Senate in the midterm elections. Here’s why.
First, some of Obamacare’s least popular provisions go into effect in 2014. This includes a new $60 billion tax on health insurers, which will be levied relative to premiums collected and directly passed on to consumers. And, of course, Obamacare’s requirement that individuals secure health insurance coverage (or pay a tax penalty) kicks in during the coming year as well.
Second, millions of Americans who buy their coverage on the individual market or get it through small employers will be shocked by just how much their premiums go up in 2014. The young and healthy will be especially susceptible to this rate shock, and this in turn will further drive them away from purchasing coverage in future years. Given skyrocketing premiums, the economic incentives for many of these “young invincibles” are aligned against buying coverage in the coming years. But these are also the people that the ACA most needs to be enrolled through its health insurance exchanges to offset the comparatively higher risk and costs associated with insuring the sick and old. These dynamics may lead to even higher premiums in the coming years.