With the results now in from the Affordable Care Act’s third open enrollment period, it’s getting increasingly difficult to sugarcoat the extremely low numbers of enrollees relative to original projections. The 12.7 million people who signed up for an exchange plan amounts to just half as many enrollees as was projected by government and private sector research organizations when the ACA passed.
The Rand Corporation predicted 27 million, the Centers for Medicare and Medicaid Servicespredicted 24.8 million, the Urban Institute predicted 23.1 million, and the Congressional Budget Office predicted 21 million.
N.C. Insurance Commissioner Wayne Goodwin this week became the latest public official to warn of the harms wreaked by the Affordable Care Act, saying the federal insurance law has destabilized the state’s insurance market and now threatens to leave some residents without options for health insurance.
Goodwin expressed his concerns in a letter sent Tuesday to Sylvia Burwell, secretary of the U.S. Department of Health and Human Services, as a follow-up to a personal conversation he had with the Obama administration official in November. Goodwin, a Democrat up for re-election this year, warned that the ACA is driving up insurance costs, reducing consumer options and generating unsustainable financial losses for the insurers, with the potential risk that insurers will withdraw from the state altogether.
Stung by losses under the federal health law, major insurers are seeking to sharply limit how policies are sold to individuals in ways that consumer advocates say seem to discriminate against the sickest and could hold down future enrollment.
In recent days Anthem, Aetna and Cigna, all among the top five health insurers, told brokers they will stop paying them sales commissions to sign up most customers who qualify for new coverage outside the normal enrollment period, according to the companies and broker documents.
Since October, at least six independent and credible sources have confirmed rate increases on the ObamaCare exchanges will be in the double digits. However, these are gross premium hikes. Net premium hikes paid by enrollees are distorted by tax credits paid to insurers. These badly designed tax credits have a number of perverse consequences. It is widely understood that they impose disincentives to work. What is less well understood is that the tax credits are so badly designed that they impose a ratchet effect causing net premium hikes greater than the gross premium hikes. According to new research published by the National Center for Policy Analysis, this effect is concentrated among ObamaCare enrollees in the lowest income brackets.
Private health insurers made a Faustian bargain with Democrats in 2010: In return for supporting passage of the Affordable Care Act, the companies would be able to grow their business with subsidized customers who were required to buy insurance. How’s that working out?
Except for Dr. Faustus, not great. Democrats lost control of the House and Senate thanks in considerable part to their votes passing ObamaCare on partisan lines. And now we’re learning that private health insurers are losing money on their Affordable Care Act business, as Aetna was the latest to acknowledge on Monday during its quarterly earnings report.
The head of the third-biggest U.S. health insurer said he has “serious concerns” about whether or not ObamaCare’s new markets are sustainable, echoing criticism from other top for-profit insurers.
“We continue to have serious concerns about the sustainability of the public exchanges,” Aetna Inc. Chief Executive Officer Mark Bertolini said on a call Monday while discussing the company’s fourth-quarter results. “We remain concerned about the overall stability of the risk pool.”
Large U.S. health insurers have faced a rocky start in the Patient Protection and Affordable Care Act, which in 2014 opened up new markets where millions of Americans buy coverage, often with tax subsidies to help them afford it. Aetna is one of the biggest insurers in ObamaCare and, like its rivals UnitedHealth Group Inc. and Anthem Inc., has struggled to make a profit in the business.
Blue Cross and Blue Shield of NC is expecting to lose more than $400 million on its first two years of Obamacare business. According to this morning’s News and Observer, “The dramatic deterioration in Blue Cross’ ACA business is causing increasing alarm among agents and public health officials.” In response to its bleak experience with the ObamaCare exchange, the company has decided to eliminate sales commissions for agents, terminate advertising of ObamaCare policies, and stop accepting applications on-line through a web link that provides insurance price quotes–all moves calculated to limited ObamaCare enrollment.
Chris Conover of Duke University’s Center for Health Policy & Inequalities Research explains what we can learn from North Carolina’s experience.
Freedom Partners Chamber of Commerce has analyzed all publicly available information for health-insurance premiums from healthcare.gov and state insurance departments. It then calculated the weighted averages for all health-insurance plans available on the Affordable Care Act’s exchanges. The weighted average gives a more accurate view of overall premium increases, because it takes into account each insurance plan’s market share.
Findings reveal that nationally, premiums for individual health plans increased on average between 2015 and 2016 by 14.9%. Consumers in every state except Mississippi faced increased premiums, and in no fewer than 29 states the average increases were in the double digits. For a third of states, the average premiums rose 20% or more.
The third open-enrollment season for health plans under the Affordable Care Act moved into its final hours Sunday night with little fanfare from Obama administration officials who had been urging consumers to buy insurance.
It was unclear whether the close of the three-month enrollment window drew any stampede of last-minute shoppers on HealthCare.gov, as was the case during the first two sign-up years. In each of those, federal health officials trumpeted a late surge of people choosing health plans as evidence of Americans’ eagerness for coverage.
But on Sunday, the officials provided no figures about the final weekend’s volume of traffic on the federal insurance website.
This one weird trick can help even rich people buy ObamaCare at sharply reduced prices. Really.
A number of wealthy individuals, some of whom were “disgusted” with ObamaCare when it first went into effect, nonetheless are now taking advantage of federal financial aid available under that health-care law to help significantly reduce their monthly insurance premiums.
Carolyn McClanahan, a Jacksonville, Florida-based financial advisor and medical doctor, told CNBC that she’s steered at least five such clients, whose individual net worths range between $1 million and $3 million, toward buying ObamaCare health plans because of the federal subsidies available due to their taxable income levels.