Consumer Power Report #502
March 23 marked the sixth anniversary of passage of the Affordable Care Act (ACA), legislation that was promised to provide millions of Americans with affordable health insurance they otherwise couldn’t get while improving the quality of care for those who already had health insurance. One of the most ambitious aspects of ACA was creation of the health insurance marketplaces, which proponents of the law said would increase market competition and lead to lower costs for consumers and insurers.
A new report by Edmund Haislmaier, a senior research fellow for the Center for Health Policy Studies at The Heritage Foundation, shows ACA has limited consumers’ health insurance options by driving numerous health insurers out of the Obamacare marketplace. According to Haislmaier, there are now only 287 “exchange-participating insurers,” down from 307 in 2015 and significantly less than the 395 insurers Haislmaier says were in operation in the 50 states and Washington, DC in 2013, only one year prior to the opening of the ACA health insurance marketplace.
Haislmaier also says 22 states and Washington, DC, representing 45 percent of all states, now have fewer health insurance providers offering plans than they did just one year ago. Only 10 states have managed to increase the number of insurers in their health insurance marketplaces.
Among the 45 exchange insurer departures, 31 were “voluntary exits,” and 21 of those resulted from insurers pulling completely out of all ACA exchanges.
The primary reason insurers are leaving Obamacare exchanges is cost. ACA provisions – notably the individual mandate, the requirement insurers must cover pre-existing conditions, and coverage requirements – are leading to higher enrollment rates for more expensive, traditionally uninsured Americans without increasing the pool of younger, healthier health insurance consumers, many of whom are finding Obamacare too expensive.
The Wall Street Journal reports new sales figures show many people are opting to enroll in short-term health insurance policies, which are much cheaper and don’t satisfy ACA’s individual health insurance mandate, instead of enrolling in a much more expensive Obamacare plan. Even with the added cost of having to pay the ACA fine for not having proper health insurance, the total cost of being insured is much lower going this route. According to EHealth, the number of people applying on its site for short-term health insurance policies in 2015 was double the number who applied in 2013, according to The Wall Street Journal. Similarly, “HealthMarkets Inc., a national insurance agency, said short-term sales in 2015 were about 150% higher than in 2013.”
Making matters even worse, health care costs continue to rise across the nation. Writing for the American Enterprise Institute, Ramesh Ponnuru says despite claims made by the Obama administration of slowing health care cost increases, “The most recent data we have show that health spending in 2014 grew at the fastest rate since 2007,” wrote Ponnuru. “That might be expected in a year when many of the law’s subsidies started flowing. But the Centers for Medicare and Medicaid Services project that the annual rate of growth of national health spending will keep rising over the next five years and then level off a bit – at a rate higher than we saw in 2008 or 2009.”
Rather than take massive losses resulting from rising health care costs and the Affordable Care Act’s anti-business regulations – as UnitedHealth did in 2015, when it lost nearly $475 million – insurers are leaving the Obamacare marketplaces for greener pastures, greatly limiting the number of quality health insurance plans available to consumers in ACA exchanges.
— Justin Haskins
IN THIS ISSUE:
UnitedHealth Group, the largest U.S. health insurer, has decided to call it quits in two state Obamacare markets in the latest challenge to President Barack Obama’s health-care overhaul.
The insurer won’t sell plans for next year in Georgia and Arkansas, according to state insurance regulators. Tyler Mason, a UnitedHealth spokesman, confirmed the exits and declined to say whether the company would drop out of additional states.
Many insurers have found it difficult to turn a profit in the new markets created by the Affordable Care Act, under which individuals turned out to be more costly to care for than the companies expected.
UnitedHealth and Aetna both posted losses from the policies last year, as did big Blue Cross and Blue Shield plans in states such as North Carolina.
UnitedHealth began warning in November that it might exit ACA markets as it racked up losses. In December, the company said it should have stayed out of the individual exchanges longer.
Leaving some state exchanges could help UnitedHealth boost its profits next year, Ana Gupte, an analyst at Leerink Partners, said Friday in a research note.
“Exits from unprofitable markets will act as a tailwind to earnings,” Gupte wrote. “We have more conviction in our view that there is upside” to UnitedHealth’s earnings estimates.
The ACA relies on private health-insurance companies to offer policies that individuals can buy in government-run markets.
About 58 percent of consumers had fewer options in 2016 than the year before, while 31 percent had more choices, according to consulting firm McKinsey & Co.
SOURCE: By Zachary Tracer, Bloomberg
A new report released by the Association of American Medical Colleges (AAMC) projects that by 2025 there will be between 61,700 and 94,700 fewer doctors in the United States.
Reasons for the shortfall, the report says, include increased demand due to Obamacare’s Medicaid expansion and the fact that Americans are living longer, while the supply of physicians is being cut due to aging and retirement, as well as potential doctors’ reassessment of careers in medicine in light of the high costs of earning a medical degree and medical malpractice insurance.
SOURCE: By Susan Berry, Breitbart News
A type of limited health coverage with features largely banned by the Affordable Care Act is flourishing, as some consumers grab onto an alternative they say is cheaper than conventional plans sold under the law.
Sales of short-term health insurance are up sharply since the health law’s major provisions took effect in 2014, according to insurance agencies. New sales figures show the temporary policies, traditionally sold to consumers who are trying to fill coverage gaps for a few months, have continued their surge recently – even though people who buy them face mounting financial penalties because the coverage doesn’t meet the ACA’s standards. …
“This is exactly the kind of coverage the ACA was designed to get rid of,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. Consumer advocates say they fear buyers don’t understand the short-term policies’ limits, or the risk of penalties that can hit $695 or more for adults in 2016. Some lower-income consumers also may not realize they qualify for federal subsidies that can sharply reduce the cost of ACA plans. …
The health law may be fueling sales of these plans in a few ways, agents say. Short-term plans are offered year-round, while sale of ACA plans is generally limited to an “open enrollment” period each year.
Many ACA plans offer narrow choices of health-care providers as a way to keep down costs. A recent promotional email to insurance brokers from UnitedHealth Group Inc. touted its short-term policies’ broad access to doctors, compared with limits found in “most major medical plans.”
In addition, if consumers develop health problems they can move to ACA plans that cover pre-existing conditions.
Your Health Idaho, the state’s exchange, is not an insurance company. It is a conduit, responsible for helping Idahoans buy health plans that comply with the Affordable Care Act.
This year, more than 100,000 people used the exchange to buy plans. Most of those customers qualified for federal subsidies, available only through the exchange, to help pay premiums because their incomes were too low to pay full price.
Idaho’s exchange operated with little turbulence and received praise for being lean and efficient after it opened in 2013, at first piggybacking on the federal exchange until Idaho built its own machinery to process tens of thousands of insurance applications each year. Now, however, some Idaho consumers and agents say the exchange is struggling to do its job.
Your Health Idaho is months late sending hundreds of Idahoans a document they need to file their taxes this month.
“I cannot tell you how incredibly frustrated I am,” said Rose Penwell, a Boise resident. “It is an amazing system that’s happening right now. And by amazing, I mean incredibly broken.”
The exchange’s call center no longer can help solve problems. Instead, callers are being told to file support tickets by email. After calling five to 10 times per week, Penwell sent an email March 7 and got a response 16 days later.
In some cases, people with medical emergencies or ongoing health needs still have not been enrolled in insurance plans – months after they signed up for coverage.
“We are currently reviewing about 1,700 enrollment emails,” Your Health Idaho spokeswoman Karla Haun told the Idaho Statesman. “These emails range from questions regarding coverage dates and special enrollments to policy clarification. We are unable to categorize which of these are related to possible enrollment delays.”