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.
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 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.
For many consumers, switching health insurance plans has become an unwelcome ritual, akin to filing taxes, that is time-consuming and can entail searching for new doctors and hospitals each year. Gail Galen, 63, is preparing to leap to her third insurer in three years as she braces for another round of shopping on the federal insurance marketplace. “Every year I feel like I’m starting all over again, and I just dread it,” said Galen. “My stress level just shoots up.”
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.
Big news: UnitedHealth Group slashed its earnings outlook today, citing new problems related to Obamacare, and told investors it may exit the program’s exchanges. “In recent weeks, growth expectations for individual exchange participation have tempered industrywide, co-operatives have failed, and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated,” Stephen J. Hemsley, chief executive officer of UnitedHealth Group, explained in a press release.