In this era when facts seem to be viewed as an affliction, not a cure, the greatest flaw in assessing the relative stability of the Obamacare program centers on realizing that we have 50 separate marketplaces, in each state, plus distinct market forces at work within sections of many states.
When diagnosing the Affordable Care Act (ACA), no monolithic conclusion exists. There is good and bad, healthy and worrisome.
On the right, conservative congressional Republicans crassly claim that Obamacare is caught in the clutches of a “death spiral.” On the left, Bernie Sanders loyalists eagerly see ACA shortcomings as an opening to push for a government-run single-payer health system.
Well, the results are in: Obamacare is clearly not working as hoped – mostly due to its failure to produce a pool of customers that generates profits for insurance companies – but claims that the ACA is on its death bed consist of political malpractice – or manipulation.
Overall, Politico reports that most of the 12 million people who landed health insurance through Obamacare’s competitive marketplaces – the healthcare.gov exchanges — will have the same number of companies to choose among next year as they did in 2017.
Despite the drumbeat of headlines about fleeing insurers, only about 25,000 Obamacare customers – less than 1/100th of 1 percent of the U.S. population — live in communities facing the prospect of having no insurer next year.
Maps created by Bloomberg News show the vast majority of America’s geography will experience no change in Obamacare coverage options while a few dozen counties will gain coverage.
Obamacare troubles not a Michigan issue
In Michigan, I would suggest that most voters would be stunned by the realities. Most counties still offer four or more insurance companies (and the various plans they sell) on the Obamacare exchange. In the upcoming 2018 enrollment period, counties throughout western Michigan will offer greater ACA coverage, with three or four companies each participating. In southeast Michigan, options will decrease but counties will still offer eight competing insurers each.
In other words, those on Obamacare in Michigan will enjoy far more health care choices than the vast majority of workers who rely on employer-provided health insurance. Even unionized companies cannot offer their workforce the insurance industry competition that the ACA provides.
Nonetheless, disturbingly high premiums and ridiculously high deductibles impacting some plans across the nation serve as a blackmark on the promise of Obamacare.
Just 141 insurance companies submitted plans to sell on the nation’s exchange markets for next year — a nearly 40 percent decrease from this year, according to the Department of Health and Human Services. Insurance pools with more sick and old people than anticipated have resulted in premium increases of 20 percent or more and deductibles of $5,000 or more.
In some states, four consecutive years of profit losses for insurers operating on the exchanges has created mayhem.
As a result, the uninsured rate nationwide, which had previously achieved record lows of 10.9 percent, has slid upward to 11.7 percent.
But experts with no ties to politics or the health care industry told Politico that the downside doesn’t mean the Obamacare markets are on the verge of collapse. One big reason for their resilience, which is largely lost in political circles, is that the overwhelming majority of Obamacare customers are eligible for tax subsidies that shield them from big price spikes.
A recent report by Standards & Poors found that indecision in Washington, with several versions of Obamacare “repeal and replace” bills going nowhere, has caused some insurers to protect themselves against future shock waves by vaguely implementing large premium increases.
“It’s an improving market, but still fragile, and uncertainty doesn’t help,” said Deep Banerjee, one of the authors of the S&P report.
Washington gridlock makes everything worse
In Tennessee, for example, the state’s dominant Blue Cross Blue Shield plan seeks an average rate hike of 21 percent next year. But the insurer attributed that increase entirely to uncertainty about federal subsidy payments and enforcement of the ACA’s individual mandate. In other words — attempts by the Trump administration to short-circuit Obamacare.
Insurers have until late September to report to state authorities about their final decisions on ACA marketplace participation. If they see more signs of market mayhem — in particular, if the Trump administration follows through on threats to cut off cost-sharing subsidies — a mass exodus by the industry could still happen.
Meanwhile, President Trump disingenuously tweeted earlier this week that if Obamacare collapses, he doesn’t “own it” – meaning the responsibility for up to 32 million people losing health care coverage. Yet, the GOP majority in Congress tipped their hand months ago, tacitly admitting they wanted a bumper sticker message for the 2018 campaign rather than a fix for tens of millions of Americans. That became apparent when they failed to engage in committee hearings.
Looking back, the 2016 presidential campaign was so unprofessional, so scattershot that news of large insurers pulling out of the ACA — Aetna, United Healthcare, Anthem – was brushed aside by more incendiary talking points in advance of November. The obvious response would have been detailed Capitol Hill hearings with insurance company CEOs explaining why the mechanics of Obamacare failed to meet the expectations they expressed years earlier.
That never happened. And a pragmatic approach on Capitol Hill in the first months of the Trump presidency also never materialized. Not even close. Both parties are spinning the story, hoping for a battering ram they can implement in the 2018 elections (still nearly 16 months away) to sway gullible voters.
Meanwhile, 11 governors, Republicans and Democrats who deal with the real world at the ground level, have urged a bipartisan approach to health care in Washington.
But take a deep breath. The guys in the white hats, who have been listening to the professionals in white coats, are relying on facts and expected outcomes. A compromise cure isn’t likely, even if neglect causes Obamacare to collapse onto its death bed.