Sunday, July 24, 2016
Will Premium Spikes Announced Week before November Election Puncture the ObamaCare Balloon?
In recent years, spring has brought with it a new tradition: headlines about proposed premium increases under the Affordable Care Act (ACA) and predictions of the law’s demise.
Benjamin D. Sommers, MD, PhD,”ObamaCare’s Skyrocketing Premiums? Why the Sky Isn’t Falling,” New England Journal of Medicine, July 21, 2016
Insurers are asking for these premium increases in the following states.
One, in states in which the federal government reviews the rates, and either accepts or reduces them.
Texas, BCBS, 60%
Oklahoma, BCBS, 49%
Missouri, Humana, 34%
Wyoming, BCBS, 10%
Two, in states in which state insurance regulators review and modify rates. These states and insurer rate increase requests are;
Michigan, Humana, 39%
Oregon, Providence Health Plan, 24%
Tennessee, BCBS, 63%
North Carolina, 32.5%
Not to Worry
Critics say these requested rate increases indicate a failure of ObamaCare to deliver on its promise of lower premiums.
Not to worry, retorts, Benjamin D. Sommers, MD, PhD, of the Harvard School of Public Health, a consistent supporter and advocate of ObamaCare.
First, spring requests for increases are just opening bids. Rates are likely to be reduced in the “rate review” process at least 30% of the time.
Second, consumers can shop for less expensive plans with lower premiums
Third, 80% of consumers who purchased coverage on the exchanges qualify for ACA’s tax credits which lower costs of premiums.
Not So Fast
Not so fast, counter critics. It is difficult for consumers to switch . Some states do not offer credible competite plans. After 2016, two of the health law’s provisions – risk corridors and reinsurance – expire. And although 12 million people receive tax credits, an equal number – three million in the exchanges and nine million with insurance outside the exchanges, will be forced to buy full unsubsidized care. In any event, taxpayers will have to foot the bill for exchange subsidies.
Sommers admits premium growth is not “unworthy of policy and media attenation.” Taxpayers will have to fund subsidies ACA tax credits and Medicaid expansion , but to scrap the law would “ignore the devastating effect that repeal would have on the estimated 20 million who have thus far gained insurance under the law.”
Spoken like a true “redistributionist.” In Sommers’ view, which emphasizes social justice and compassion, repealing the ACA is not an option. Only living with it and refining it is. After promising in the beginning that the ACA would lower premiums by $2500 per family per year, you must now live with the reality that the ACA has systematically raised premiums, often to unaffordable levels for the unsubsidized beyond the reach of federal largess and beyond the ability of insurers to sustain lower premiums. In retrospect, lowering premiums was a fool’s errand. You cannot cover more people while offering more benefits for less money and lower premiums. You can fool most of the people most of the time, but not all of the people all of the time.