HHS-Funded Study: Obamacare Will Suffer ‘Death Spiral’ If Subsidies Fail

The Obama administration has funded a new study by top consulting firm RAND Health that startlingly finds that if taxpayer subsidies are eliminated, Obamacare exchanges will fall into a “death spiral.”

The study comes in the wake of a number of lawsuits which are challenging the Obama administration’s implementation of Obamacare subsidies. Three lawsuits have made it to U.S. Circuit Courts, just one step from the Supreme Court, arguing that the text of the Affordable Care Act allows premium subsidies for state-run exchanges only.

The report was sponsored by HHS’s Office of the Assistant Secretary for Planning and Evaluation, which, among other duties, compiles the enrollment statistics each month during open enrollment for Obamacare exchanges. Given the ongoing controversy over Obamacare subsidies, HHS sponsoring the study could be a sign that the administration is beginning to worry about its prospects.

The administration’s motivations aside, the key finding from the report belies HHS’s pro-Obamacare position. Eliminating premium subsidies entirely would “cause large declines in enrollment and substantial increases in premiums,” RAND Health concluded. In short — Americans are far less likely to want Obamacare coverage, or to be able to afford it, when taxpayers aren’t footing the bill.