Open enrollment for Obamacare starts in a couple days. There have been a lot of reports about insurers leaving the exchanges and those that are remaining raising premiums. Some of the stories are true and some are presented as misinformation.
Not all is in the headlines
• It is true many insurers do not want to participate in the exchanges. It comes down to profits.
• The people who apply through the exchanges have tended to be sicker people and as a result insurers have had to spend more money on them.
• Many insurers priced their plans low to attract participants.
• The federal government (thanks to Republican meddling) failed to provide promised financial support for losses.
It should be no surprise that insurers would focus on the healthier segment of the market and abandon the exchanges. To say Obamacare is not working in this case, is to really say the insurance companies are not making the profits their shareholders are looking for.
A family in texas
A recent news story told of a family in Texas who would have only one insurer in their area next year. The situation was very bad for this family. They have a child that needs to take an expensive medication and this single insurer does not cover the medication.
This is one of the true horror situations families are falling into.
• The story goes on to explain that the family’s income is too high to receive a premium tax credit (subsidy). Now, the story starts to take a strange twist into the grey area of misinformation by leaving out information.
It is very bad the single insurer in their local exchange will not cover their child’s medicine.
♦ What the story does not explain is that because the family does not qualify for a subsidy there is no real reason to purchase insurance through the exchange.
The exchange is the only place a subsidy can be used. Since the family does not receive a subsidy they can purchase any plan in the open market.
How many plans are available in this family’s market area? And what would they pay?
The story should explain but it does not. Most readers would assume this family has no other options when that probably is not true.
♦ The story also fails to point out a key benefit of Obamacare that this family gets.
Pre-existing conditions are eliminated. Before Obamacare this family would most likely have been denied coverage in the open market for their child’s health condition.
If they had been able to find an insurer to take them they would surely have had to pay an inflated rate plus possibly accept a rider against their child’s condition.
People cannot understand
People who never had to purchase health insurance before Obamacare cannot understand the pain and suffering families had to go through in those days.
Today the largest voices of anger against Obamacare are coming from people who received health insurance through an employer and are not even affected by the exchanges, but they think they might be. Why do they think that?
♦ The marketplaces established by Obamacare are for people who do not receive insurance through their employer or through Medicare and Medicaid.
The average person has trouble grasping this fact. And as result they are easily swayed by wild claims.
The Affordable Care Act had two main goals: cover the millions of uninsured and rein in the growth of healthcare costs.
The number of Americans without health insurance has declined to its lowest level, while the growth in healthcare costs has plunged.
Insurance rates have gone up, but since Obamacare private insurance rates have risen less than half as fast as they did in years prior to Obamacare.
This does not capture the headlines.
The rise in premiums is only one part of the story but it gets headlines.
The biggest increases are coming to the policies sold on the exchanges.
♦ The way the Affordable Care Act is structured the premium tax credit (subsidy) will also increase. So people using the exchanges and receiving the subsidy will not be as strongly impacted by these increases.
People buying individual coverage off the exchanges will see a smaller premium increase than the on-exchange people. But the off-exchange people may be impacted more due to the absence of subsidies.
♦ High deductibles is another largely ignored part of the story. In 2016, the average off exchange plan had a deductible close to 50% higher than the same or similar plan found on the exchange. While premiums were on average 13% higher off the exchange compared to the same or similar plan found on the exchanges.
Deductibles have risen to extreme levels both on the exchanges and off the exchanges. The phrase can’t afford to use it was heard much more in 2016. This a serious issue but not something that is new. The movement toward higher and higher deductibles was going on long before the Affordable Care Act.
♦ After the ACA became law there was a rapid movement toward levels seldom seen before. Part of the reason may have been that the ACA forced insurance companies to abide by a maximum out-of-pocket limit for in-network services.
• The ACA insulated consumers from excessive bills but that left the insurance companies looking for another way to shift costs toward the consumer. Raising the deductible and applying more things to the deductible was the course the insurance companies took.
This is a subject that affects a much wider range of people and one that should receive more attention in the press.
♦ The main reason for high deductibles comes down to profits. Healthcare costs in general keep rising plus insurance companies now have to take all people regardless of health condition.
• When profits get squeezed, insurance companies will find ways to shift more of the burden of healthcare costs unto the consumer. Higher deductibles and more restrictive plan rules are methods they use.
Healthcare and health insurance is such an important concern for our country. Insurance is complicated in itself. We don’t need misinformation from the conservative view point any more than we need misinformation from the liberal view point.
Hopefully more people will take the time to learn for themselves.