The federal government will choose health plans for hundreds of thousands of consumers whose insurers have left the Affordable Care Act marketplace unless those people opt out of the law’s exchanges or select plans on their own, under a new policy to make sure consumers maintain coverage in 2017.
“Urgent: Your health coverage is at risk,” declares a sample “discontinuation notice,” drafted by the government for use by insurers. It tells consumers that “if you don’t enroll in a plan on your own, you may be automatically enrolled in the plan picked for you.”
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Federal auditors ruled on Thursday that the Obama administration had violated the law by paying health insurance companies more than allowed under the Affordable Care Act in an effort to hold down insurance premiums.
Some of the money was supposed to be deposited in the Treasury, said auditors from the Government Accountability Office.
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Proposals to make changes to the Affordable Care Act from both sides of the political aisle show that President Obama’s health care law will almost certainly needs changes to survive.
The president, Hillary Clinton, and nearly one-third of the Senate have endorsed a new government-sponsored health plan, the so-called public option, to give consumers on Obamacare exchanges an additional choice. A significant number of Democrats, for whom Senator Bernie Sanders spoke in the primaries, favor a single-payer arrangement.
Donald Trump and Republicans in Congress, on the other hand, would go in the direction of less government, reducing federal regulation and requirements so insurance would cost less and no-frills options could proliferate. Mr. Trump would, for example, encourage greater use of health savings accounts, allow insurance policies to be purchased across state lines and let people take tax deductions for insurance premium payments.
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Insurers have announced that they are sharply raising prices or pulling out of the Obamacare markets entirely. Many consumers will have fewer choices of insurance plans, and many insurance plans will include fewer doctors and hospitals. Many of the most important problems can be understood if you think of an Obamacare marketplace as a particular kind of restaurant: an all-you-can-eat buffet. It can be a solid business, but it’s hard to get the pricing right. For example, you can be in deep trouble if your buffet suddenly becomes the favorite hangout of the high school football team. Unless you make major adjustments, you will quickly lose money. That may be what has happened to some of the companies selling health insurance.
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In its quest to remake the nation’s health care system, the Obama administration has urged doctors and hospitals to band together to improve care and cut costs, using a model devised by researchers at Dartmouth College.
But Dartmouth itself, facing mounting financial losses in the federal program, has dropped out, raising questions about the future of the new entities known as accountable care organizations, created under the Affordable Care Act.
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In the last few years, even though premiums in the Affordable Care Act’s health insurance marketplaces were rising, most customers could avoid a big price rise by shopping for a cheaper plan.
Next year, according to a preliminary analysis, that is going to be a lot harder.
Even someone who shopped wisely this year and is willing to switch plans to get the best deal next year is looking at an average premium increase of 11 percent, according to an analysis of rate filings in 18 states and the District of Columbia provided by the McKinsey Center for U.S. Health System Reform.
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Long-time Obamacare advocate and Aetna chief executive Mark Bertolini created a political earthquake when he announced his company will drastically reduce its individual public exchange participation next year. Similar announcements by United Healthcare, Humana and even some Blues plans show that Obamacare is failing.
Those who designed this disastrous government intervention into the marketplace now want more disastrous government intervention. Their solution is more taxpayer money for subsidies to individuals and insurance companies and a “public option” government health plan.
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So much for choice. In many parts of the country, Obamacare customers will be down to one insurer when they go to sign up for coverage next year on the public exchanges.
A central tenet of the federal health law was to offer a range of affordable health plans through competition among private insurers. But a wave of insurer failures and the recent decision by several of the largest companies, including Aetna, to exit markets are leaving large portions of the country with functional monopolies for next year.
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The Obama administration is moving to end duplicate coverage for tens of thousands of people who are enrolled in Medicaid and simultaneously receiving federal subsidies to help pay for private health insurance under the Affordable Care Act.
In the last few days, consumers around the country have received letters warning, in big black type: “People in your household may lose financial help for their marketplace coverage.”
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It is all about the price.
Millions of people buying insurance in the marketplaces created by the federal health care law have one feature in mind. It is not finding a favorite doctor, or even a trusted company. It is how much — or, more precisely, how little — they can pay in premiums each month.
And for many of them, especially those who are healthy, all the prices are too high.
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