Both parties are getting it wrong. And that’s surprising. Don’t these folks ever talk to the voters?

In the House of Representatives, the GOP’s “number-one priority for health care reform” is lowering health insurance premiums.

As for the White House, its response is all about protecting people with expensive health care problems. If Republicans had their way, 4.8 million Texans would lose protection for their preexisting conditions, according to the Biden administration.

Here is why both of these messages miss the mark.

To give Republicans their due, it is certainly true that premiums in the (Obamacare) exchanges are sky-high. In fact, if you add together the average premium and the average deductible for a family of four, a family without any subsidy must pay more than $25,000 before it gets any benefit from their plan. That’s the equivalent of buying a Volkswagen Jetta every year just to get health care.

However, the vast majority of folks who buy their own insurance are getting hefty subsidies. So much so, that 8 in 10 enrollees in the exchanges pay $10 a month or less. For a family with average income, the premium is usually zero.

Wake Up!

Wake up Republicans. If you begin by talking about high premiums, you are failing to reach 80% of the voters who buy their own insurance.

Meanwhile, the mistake Democrats are making is to believe their own talking points. “Preexisting conditions” was the main argument for Obamacare when it was enacted in 2010. But what is the situation more than a decade later? It’s awful.

Wake up, Democrats. The average annual out-of-pocket exposure for a family in 2024 is $18,900 in the federal marketplace exchanges. And if health care problems linger (which is the very definition of “chronic illness”), the family faces that expense every year. To make matters worse, medical centers of excellence around the country (which house specialists that some patients really need) won’t accept Obamacare insurance.

Here is the brutal truth. Families with the worst medical problems and the most expensive medical needs would in many cases be better off if Obamacare had never become law.

It is true that before the passage of the Affordable Care Act, people entering the individual market could be denied coverage if they had an expensive-to-treat medical condition. Although Democrats talk as though this was an everyday event, in fact it rarely happened.

When it did happen, in most states people could join a risk pool, where there was a higher premium, but with out-of-pocket exposure well below Obamacare plans today. Further, risk pool plans were typically garden-variety Blue Cross plans—with access to just about any doctor or medical facility.

The Reality

Here is the reality that both parties are missing:

If you have to buy your own insurance, have average income and are healthy, your options have never been better. But if you have a chronic illness and high medical costs, your options have never been worse.

The healthy family not only is paying little or no premium, but the only health care they need is preventive care, which must be made available at no charge. For this family, health care and health insurance are free.

By contrast, if you are sick, the out-of-pocket costs can be crushing; and even then, narrow networks may not include the specialty care you need. Further, in almost all cases, if a patient goes out of the network, the insurance plan pays nothing. In that case, getting the care you need is just as expensive as if you were completely uninsured!

Another disastrous feature of the Obamacare exchanges is the very high implicit marginal tax rates imposed on average-income families with high medical expenses.

Writing in The Wall Street Journal, Beverly Gossage and I gave the example of a Dallas family of four, earning $60,000 a year, with two children who have expensive-to-treat medical conditions. Fortunately, the two children qualify for Medicaid. The two parents are healthy; and since they pay zero premium for their health insurance, health care for this family is essentially free.

Suppose the family earns $10,000 more dollars of income, however. The two children no longer qualify for Medicaid and must be included in an exchange plan. Although the plan has a zero premium, the family’s out-of-pocket costs are now as high as $18,200. That’s a 182 percent marginal tax rate!

Politicians Ignore the Problems, But Voters Shouldn’t

When Democrats in Congress had a chance to pass an Obamacare reform, they did nothing about the outrageous out-of-pocket costs or the draconian marginal tax rates for the sick. Instead, they chose to spend $64 billion a year to lower premiums for high-income healthy families.

All the while, not a peep of complaint came from Republicans—who still wrongly think premiums are too high for most people. It is not the premiums; it is the sky-high out-of-pocket exposure.

While politicians ignore these problems, all voters should care about them. Even if you are completely healthy and are enrolled in a conventional employer plan with very generous coverage, remember: we all can get sick, and the individual market is only one layoff away.