ObamaCare’s impact on health costs.
The word is right there in the name of the law: “Affordable.” The ACA promised to bring health insurance down to earth, letting uninsured people buy policies that didn’t break the bank, and bringing the astonishing cost of medical care into reach for all Americans.
What’s becoming clear, three years in, is that “affordable” depends where you look. Twenty million more people are covered and tens of millions of others have broader benefits because of Obamacare. But many insurers, faced with new coverage requirements and competition on premiums, have shifted costs onto consumers.
. . .
The Illinois Insurance Department moved Tuesday to shut down Land of Lincoln because of its unstable financial health, leaving about 49,000 policyholders in a lurch. They will lose coverage in the coming months, but neither regulators nor the company have said exactly when.
Policyholders will be able to buy insurance from a different carrier to cover them for the rest of 2016, according to the state Insurance Department. But switching plans is going to cost them.
The co-pays and deductibles enrollees have been paying since January will not transfer to new plans. A new plan will reset deductibles and out-of-pocket maximums paid by consumers.
. . .
Health insurers in Michigan are seeking another round of double-digit rate increases next year for plans they sell to individuals, although smaller increases for their small group plans.
Insurance giant Blue Cross Blue Shield of Michigan has asked state regulators for permission to boost its premium rates by an average 18.7% for individual plans, along with a 14.8% increase for its Blue Care Network individual plans. Those plans — closely associated with the Affordable Care Act, commonly referred to as Obamacare — cover about 200,000 individuals in the state, down from 310,000 people as recently as a year ago.
. . .
If you’re looking to find a smashing Obamacare success story—a place where the nation’s biggest and most controversial new law in a generation has truly lived up to its promise—you might stick a pin directly in North Carolina.
The central pledge of the Affordable Care Act was to make insurance available to people who didn’t have it, creating a new safety net for millions nationwide. And in North Carolina that’s exactly what happened. People flocked to the program: More than 600,000 people there signed up for Obamacare policies in 2016, and roughly 90 percent of those got financial help to pay their insurance bills, also through Obamacare. Thanks directly to the ACA, the number of people without health insurance in North Carolina has plummeted by 30 percent in the past three years. Far more people are covered, and far more of them can afford their health insurance.
. . .
Out-of-pocket spending is a controversial topic in healthcare. On the one hand, the purpose of insurance is to reduce the financial impact of adverse events, like illness and injury, so higher out-of-pocket costs mean insurance is providing less protection. On the other hand, with little or no exposure to costs, a patient might over-consume healthcare, going to doctors for minor illnesses that could be self-treated, or getting screening tests – or even surgical procedures – that aren’t really necessary. In the latter case, the incentive effects of out-of-pocket payments might reduce wasteful healthcare spending and leave spending that is truly necessary mostly unaffected. The result would be a reduction in overall healthcare spending.
When exposure to out-of-pocket costs rises, which effect actually dominates? A recent study in JAMA Internal Medicine gives a hint of what happens, and it’s not looking good for incentive effects in the world of the Affordable Care Act (ACA).
. . .
This year, premiums were up an average of 8 percent. In many states, double-digit premium hikes were the norm.
The GOP House blueprint for health reform repeals these taxes. Specifically, the report cites:
- the 3.8 percent bracket in the Medicare payroll and self-employment tax
- the 3.8 percent “net investment income tax” (NIIT) on savings and investment
- the additional 10 percentage point surtax for non-qualified health savings account (HSA) withdrawals
- the “medicine cabinet tax” which denies the use of pre-tax HSA, health reimbursement arrangement (HRA), and flexible spending account (FSA) dollars for the purchase of non-prescription, over-the-counter medicines
- the $2500 cap on medical FSA deferrals
- the “Cadillac plan” tax of 40 percent on high cost health insurance plans
- the “health insurance tax” (HIT)
- the tax penalties associated with the individual and employer mandates
- the medical device excise tax
- the industry tax on pharmaceutical companies
- the “high medical bills tax” which disallows an itemized deduction for medical expenses for millions of middle class families
- a tax on employers helping their retired employees purchase Medicare Part D plans
In presidential politics, party professionals on both sides of the aisle live in fear of the dreaded “October surprise” that can compromise their candidates’ chances.
In 2016, the joker in the deck may come the first week of November — and it won’t be a surprise, just a shock: Fueled by the requirements of the Affordable Care Act, Americans’ health insurance premiums are likely to spike.
The policy debates that preoccupy Beltway insiders are often far removed from the concerns of most American voters. The Export-Import Bank, the intricacies of the Dodd-Frank financial regulatory requirements, quantitative easing, and rules promulgated in obscure administrative agencies — this is not the stuff of middle-class anxiety. While such policy and regulatory decisions do affect citizens nationwide, it’s not always immediately obvious how. Not so jobs, wages, schools, and health care — these issues hit home.
. . .
Medical costs will continue to grow at a mostly flat rate next year, PwC’s Health Research Institute projects in a report released today.
Costs will grow at roughly 6.5 percent in 2017, in line with 2016 trends, the report says. Growing use of convenience care and increased access to behavioral health services will increase costs, while an increased number of high performance networks and increasingly aggressive pharmacy benefits managers will counteract that. The study looks at spending for Americans with employer-sponsored health insurance. More than half of Americans are covered through employer-sponsored plans.
. . .
A new report from the Kaiser Family Foundation says the cost of the “benchmark” plan (the second-lowest-cost silver plan in a market, which is the price used to calculate subsidies) will go up 10 percent this year, double the rate at which prices increased last year. The lowest-cost silver plans are also seeing substantial hikes. This matters because these are the most frequently purchased plans.
The usual caveat applies to these preliminary requests: Regulators might not approve them. But that caveat was hauled out last year by the law’s supporters, who seemed to think that this was simply the opening stage of a negotiation in which insurers asked for the stars in the hope of settling on the moon. In fact, regulators approved large rate hikes, and the state of Oregon actually made some insurers raise rates by more than they’d planned.
. . .