In the 2012 elections, the calls to repeal Obamacare were nearly omnipresent. Criticism was relentless even as Republicans knew that they didn’t have the votes to dump the Affordable Care Act, and they didn’t have a coherent plan to replace it.
But four years later, when some major cracks are showing in the Obamacare system, Democrats look the other way while Republicans have simply moved on to other issues. Fixes to the ACA should be a prime subject on the campaign trail for presidential and congressional candidates in 2016 as the reforms are not working as expected.
The biggest surprise may be that major insurers are pulling out or cutting back on their participation in the Obamacare exchanges. The latest is Aetna, which announced that it is reducing its presence this fall by 70 percent, from 778 counties to 242 counties, due to financial losses.
Politico reports that Aetna will continue to sell insurance policies on the ACA marketplaces in just four states — Delaware, Iowa, Nebraska and Virginia — down from 15 states this year.
“More than 40 payers of various sizes have similarly chosen to stop selling plans in one or more rating areas in the individual public exchanges over the 2015 and 2016 plan years,” CEO Mark Bertolini said in a statement. “As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision.”
Department of Health and Human Services officials point to data that shows the exchange risk-pool is getting healthier and less expensive, which suggests that the new market is creating winners and losers among competing insurers.
Biggest insurers backing away
Yet, the reaction to the ACA’s realities among the largest insurance providers has to be discouraging, even for the Obama administration. According to Politico’s Dan Diamond, here is where things stand with the other four major health insurers: UnitedHealthcare will exit most exchanges this fall; Anthem says it’s now losing money on the exchanges after previously breaking even; Cigna warns that its Obamacare costs are rising but says it will continue to participate; and Humana announced its exit from most exchanges this fall.
That is a wholly unexpected turn of events after the insurance companies in 2009-10 were quietly cheering for the passage of Obamacare as it represented millions of new customers in the overall marketplace.
Another growing problem for the ACA is the failure of healthcare co-ops that were created to compete with for-profit insurers. This development, however, is not a surprise as many Obamacare critics and supporters often cited the co-ops as weak link in the chain of reforms. Just seven of the original 23 co-ops now remain.
While the percentage of uninsured Americans has dropped precipitously, ACA enrollment still lags behind projections. This is a difficulty that emerged in the earliest days of the first enrollment period.
Another surprising shortfall that has taken hold is the high deductibles – often in the $5,000 range – that have become commonplace for many healthcare plans on the ACA marketplaces. And the stubbornness of many Red States to refuse to implement the Obamacare Medicaid expansion, now several years later, has created an unexpected hole in the system.
All of these items deserve serious discussion, especially as we prepare to choose the next White House occupant for the coming four years. Instead, we get misleading news reports and political commentary focused almost entirely on rising premiums.
Cheap political points instead of substantive debate
The critics pounce when a particular insurer in a particular city or state jumps its premiums by 40% or 50%. The misleading rhetoric takes advantage of the fact that many Americans still do not understand the basics of Obamacare. Those insured through their employers wrongly believe that these large premium increases apply to them, though only a much smaller group is affected.
The nonprofit Kaiser Family Foundation conducted a survey that showed more than 80% of Americans have heard or read news reports about premium increases in the ACA marketplaces. Sixty-eight percent think those increases apply to all insurance plans or to employer plans – that would amount to 154 million Americans. In fact, they apply only to the ACA marketplace plans that provide coverage to about 11 million people. Just 10% of the public understands that the increases they were hearing about apply only to Obamacare marketplace plans.
In addition, the folks at Kaiser researched the announced premium increases for 2017 in 17 major cities and found that the average hike for a typical “silver plan” is 9 percent. What’s also not mentioned most times is that the increases for ACA enrollees are cushioned by the tax subsidies they receive based on their income. And, of course, they have the option each year to shop for a new plan.
So, what are we hearing on the campaign trail? Donald Trump said recently that people in Texas are getting hit with a 60 percent increase in their premiums. No, that only applies to the approximately 7% who rely on Obamacare and, among those, only on the enrollees who chose a Blue Cross Blue Shield plan on the exchange – if they don’t switch. Again, the average increase so far across the country is 9%.
Trump is cherry-picking, of course, taking a cheap shot that will gain applause from his followers. The GOP nominee, for example, could have mentioned that Blue Cross Blue Shield of Michigan recently announced increases of up to 100 percent or more for Michigan seniors who have a BCBS “Medigap” supplemental policy. But that massive hike cannot be blamed on Barack Obama or used as a partisan spear, so it will never be mentioned during the current campaign.
At the rate this campaign is going, the future shape of Obamacare – once one of the most highly charged issues in decades — will be cloaked in mystery until the next president and the next Congress take office in January – after voters have already cast their ballots.
