Whether it is the Centers for Medicare and Medicaid Services (CMS) determining which treatments and technologies are worth covering and how much they are willing to reimburse for them; the Agency for Healthcare Research and Quality (AHRQ) mandating quality and safety standards; or the new Affordable Care Act exchanges setting the standard for benefit packages throughout the health insurance market, it is clear that government agencies and their mandates play a powerful role in guiding the provision of health benefits and the overall construct of the market.
The backlash over ObamaCare deductibles will only intensify as customers shopping for 2017 plans a year from now face bronze-plan deductibles as high as $7,150. The Department of Health and Human Services on Friday detailed many key ObamaCare parameters for 2017, including a $300, or 4.4%, rise in the maximum out-of-pocket expense for covered medical bills — not including premium payments — from $6,850 in 2016.
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.
Executives with Arizona’s nonprofit health insurance co-op said Tuesday that they have failed to come up with additional financial backing and the insurer plans to shut down all operations December 31, 2015. The announcement by Meritus Health Partners means 59,000 Arizonans it now covers need to find a new insurer by December 15 if they want coverage on January 1, 2016.
Philip Dorsey, a retired lawyer and legal editor, recounts his experience with health insurance since the Affordable Care Act was enacted. Mr. Dorsey has been forced out of his plan each New Year’s Day since 2012.
“In the first year I got a glimpse of how reform reduced coverage for the many on the group health plans offered by large corporations to their employees. In the second year I saw how it had similar effects on the owners and employees in small businesses that obtain group plans through professional or trade associations. In the third year I would see how individuals who lost group insurance coverage were affected when forced into the individual market.”
The future of the Affordable Care Act could depend on the success of federal and state administrators in signing people up in the current open enrollment period—the last one before the 2016 election. Over 10 million people eligible for ACA coverage have yet to sign up. Retention of those already covered may be hindered by rising premiums, dissatisfaction with high deductibles or coinsurance in some plans, limited choices of providers offered by plans, or simple ignorance of the necessity to re-enroll.
UnitedHealth Group’s shock $425 million downgrade to its earnings forecast for 2015 was almost entirely driven by losses on the ObamaCare exchanges. UnitedHealth is the largest U.S. insurer by enrollment, and the company is warning it may withdraw from ObamaCare in 2017. The insurer has already suspended advertising for its ObamaCare coverage and stopped paying commissions to insurance brokers for signing people up.
The Centers for Medicare & Medicaid Services has proposed mandating minimum network standards for health plans sold on the federal marketplace in 2017 as part of an effort to handle the broad shift toward narrow provider networks. The Affordable Care Act requires that all medical policies on the exchanges have enough in-network hospitals and doctors for members so that “all services will be accessible without unreasonable delay.” However, the 381-page proposed rule (PDF) released Friday goes a step further, asking states to establish a quantitative measure to ensure ACA policyholders have sufficient access to healthcare providers.
UnitedHealth Group just announced they expect to lose $700 million in the Obamacare exchanges and are seriously considering withdrawing from the program in the coming year. Why is this happening? Because nowhere near enough healthy people are signing up to pay for the sick. The Robert Wood Johnson Foundation and the Urban Institute have come to largely the same conclusion—enrolling a total of 10 million in the exchanges, based on historic trends, would mean only about 9 million of them would be subsidy eligible. That would amount to only 38% of the 24 million people eligible for a subsidy.
One of the untold elements of the rapid decay underway in the ObamaCare exchanges is the massive shift toward the Medicaid managed care companies, and away from the traditional commercial insurers like UnitedHealth Group and Aetna. In short order, ObamaCare is evolving into a Medicaid marketplace. Not only in terms of the design and quality of the narrow-network plans that are being offered, but in the actual carriers that sell those policies.