The 25 percent increase in Obamacare premiums for 2017 announced on October 24 is eye-popping. That is five times the increase that workers are likely to see in the cost of health benefits offered by employers. Politically, this is a disaster.
However, the jump in premiums is overdue. Insurers in the exchange market have found that the cost of providing coverage is much higher than they initially projected. We expect insurers to offer coverage to everyone, regardless of their health condition. That’s good social policy, but it is expensive.
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The Affordable Care Act is in serious trouble, and the next president and Congress may well have to gut or replace it.
While many Affordable Care Act supporters remain optimistic, concerns are bipartisan. An article by two conservative writers proclaims, “ObamaCare’s Meltdown Has Arrived … half of Tennesseans covered under the plan are losing their coverage.” Minnesota’s Democratic Governor Mark Dayton says the law has “some serious blemishes and serious deficiencies” and is “no longer affordable to increasing numbers of people.” Former President Bill Clinton said, “the people who are out there busting it … wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world.”
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The 40% “Cadillac” Tax on expensive employer-sponsored health insurance is on a deathwatch because both parties in Congress dislike it. It would be best if Congress were to replace the Cadillac Tax with a simple and clear limitation on the tax preference for employer-paid premiums, as is called for the House GOP’s “Better Way” health plan. For decades, economists have complained that the open-ended tax break for employer-paid health insurance premiums is a major distortion in the marketplace. This approach is fair and promotes more transparency in the health care marketplace.
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Some health insurers say they’re paying too much to rival Blue Cross Blue Shield plans under a key pillar of the federal health law designed to compensate insurers that take on sicker and more expensive patients.
The critics’ chief complaint is that the Affordable Care Act’s risk-adjustment program unfairly rewards health plans — including Blue Shield of California — that have excess administrative costs and higher premiums. That comes at the expense of more efficient, lower-priced plans in the individual market, they say.
The Obama administration is considering changes to how these dollars are allocated in the state and federal exchanges, but critics say the proposed modifications don’t go far enough.
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The consensus is the ACA failed to reduce healthcare costs.
If we are to make healthcare affordable for everyone, the answer is not going to come from a President Hillary Clinton or a President Donald Trump. Instead, the solution can be found if we send healthcare back to the states where experimentation and innovative public policies can take place focusing on utilization and waste in healthcare.
It is there that we can look to states already on the move. Florida, Georgia, Tennessee and Alabama are considering a bold concept to reduce waste by reducing the need to practice of wasteful, defensive medicine.
Defensive medicine is any type of medical practice to avoid litigation such as tests, scans, medications and procedures.
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With major insurers retreating from the federal health law’s marketplaces, California’s insurance commissioner said he supports a public option at the state level that could bolster competition and potentially serve as a test for the controversial idea nationwide.
“I think we should strongly consider a public option in California,” Insurance Commissioner Dave Jones said in a recent interview with California Healthline. “It will require a lot of careful thought and work, but I think it’s something that ought to be on the table because we continue to see this consolidation in an already consolidated health insurance market.”
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“If Hillary Clinton were able to institute a public option, I anticipate it would accelerate insurers’ exit from Obamacare exchanges, making it unlikely that exchanges would ever become profitable, as Medicare Advantage and Medicaid managed-care are. While those programs have bipartisan political support, Republican politicians are fully committed to opposing Obamacare exchanges.
However, a public option administered by the same contractors (subsidiaries of health insurers) which process Medicare claims would be a good business opportunity for insurers. So they should be quite happy to allow Obamacare beneficiaries to shift from risk-bearing plans to a government plan.”
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A federal judge recently ruled that the Obama administration violated the Constitution by spending $7 billion on subsidies for insurance companies without Congress’s permission. Worse still, the administration knew all along that it was flouting the law.
If the ruling is upheld, Americans will face higher premiums and fewer choices in the health insurance market. If it comes to that, they’ll have President Obama to thank.
At issue are the Affordable Care Act’s “cost-sharing reduction” subsidies. Obamacare’s “essential benefits” mandates require all exchange policies to cover a long list of services, from maternity care to substance abuse treatment to speech pathology counseling. In a normal market, insurers would charge patients higher premiums, deductibles, and copayments to cover the costs of these extensive benefits.
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The implementation of ObamaCare has caused private health insurance to increase premiums and deductibles to meet both shifting market demand and regulatory compliance, largely passing on these added costs to the American people. Continuing to expand the program, as Hillary Clinton suggests, will most certainly force greater government control into our health care system. With this we will not only see a serious reduction in private sector insurer options, but also the introduction of longer wait times, wait lists, and limits on pharmaceutical innovation as evidenced in closed, government-run health care systems around the globe.
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Six years after the introduction of Obamacare, Americans are still divided over the controversial health reform law even though most tend to support many parts of the measure, a new HealthDay/Harris Poll found.
However, none of the current crop of presidential candidates appears to inspire much hope that they’ll properly handle health care policy if elected, the poll results show.
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