ObamaCare’s impact on health costs.
It is now well-established that many people buying health coverage through the ACA exchanges have to pay tens of thousands of dollars – counting both premiums and deductibles – before receiving a single dollar of coverage for treatment of any illness. The well-known prohibition on charging different rates for people with higher health risks obviously makes health coverage more attractive to people with chronic conditions or a history of serious illness. It is obvious that this would increase premiums, if these were the only people to enroll in the new plans. By making premiums independent of health status, it not only made coverage more attractive to people with health problems, but also made coverage less attractive to people who are perfectly healthy.
The latest turmoil in health insurance marketplaces created by the Affordable Care Act has emboldened both conservatives who want to shrink the federal role and liberals who want to expand it. UnitedHealth Group announced last week that it may pull out of the marketplaces in 2017 after losing money this year. This followed the collapse of 12 of the 23 nonprofit insurance cooperatives created with federal loans under the health law. In addition, insurance markets in many states are unstable. Premiums are volatile and insurers say their new customers have been sicker than expected.
A new survey by Gallup shows growing discontent with ObamaCare and the U.S. health care industry generally after years of relative satisfaction with the quality and cost of the health-care system. 53% of Americans rate health care quality in U.S. positively, 1 in 3 rate U.S. health care coverage positively, and fewer than 1 in 4 are satisfied with the cost of health care.
The new individual marketplace created under ObamaCare was intended to rival that of the employer sponsored insurance marketplace in stability and predictability, while premiums were to rise at rates much lower than the historical average. This study from the American Action Forum evaluates the degree to which these promises have been fulfilled. AAF found that the cost of both the benchmark Silver plan and the lowest cost Bronze plan will increase by 10% in 2016.
High-deductibles are problematic insofar as markets for health care services are dysfunctional. Fixing those markets should be a priority. An important element here that’s often ignored, however, is the physician or hospital. Much of the focus on price and quality transparency looks to insurers and other tools that patients can use before ever interacting with the health care system. This is very important. A patient looking to schedule a surgery, looking for a new physician, or trying to fill a prescription should have access to cost and quality information that allows for informed decisions.
For a snapshot of typical insurance prices for 2016 under the health law, The Wall Street Journal examined choices for a midrange “silver” plan through HealthCare.gov for people who currently have coverage with the most popular insurer in their state. Premiums for plans that have been the most popular in each state are rising by double-digit percentages in 20 of the state capitals’ counties, and by more modest amounts in 10 others, the Journal found.
When the Patient Protection a
nd Affordable Care Act (ACA) was signed into law in 2010, many groups projected how many people would enroll in health insurance plans satisfying the law’s new rules and requirements (ACA plans). Nearly six years later, enrollment in health insurance exchange plans is far short of initial projections, particularly for people who earn too much to qualify for subsidies to reduce high ACA plan deductibles. The dearth of exchange enrollees with at least a middle-class income indicates that the individual mandate is not motivating as many people, particularly younger, healthier, and wealthier people, to purchase coverage as was originally expected. Large insurer losses on ACA plans show that the overall risk pool is sicker and much more costly than originally projected, and are an indication that the law may require significant revision in order to avoid causing an adverse-selection spiral.
In a new study published today by the Mercatus Center at George Mason University, Brian Blase assesses key predictions made by both government and nonprofit research organizations about the Affordable Care Act’s impact. The misestimates include: overestimating total exchange enrollment, overestimating enrollment of higher income people who do not qualify for subsidies to reduce premiums, projecting too many healthy enrollees relative to less healthy enrollees, and underestimating premium increases. This Forbes post focuses on the Congressional Budget Office’s (CBO) estimates.
Many enrolling in health insurance coverage under the Affordable Care Act’s 2016 health policies will face higher premiums, higher out-of-pocket costs, fewer doctors, and skimpier coverage this year. Federal officials are encouraging people to evaluate their options and consider switching plans to try to keep costs in check. However, a review from the Wall Street Journal shows that shopping around may not help, especially for those who don’t qualify for subsidies.
Private insurance plans typically require some form of cost sharing, or out-of-pocket costs, such as copayments, coinsurance, and deductibles. This brief shows the cost sharing in plans sold to individuals through Healthcare.gov for 2016, with a focus on the variation in the ways plans may set cost sharing for services, such as physician visits, prescription drugs, and hospital stays.