Insurers and regulators have made an astonishing discovery: The Affordable Care Act individual health insurance market is pretty much a mess.
Strangely enough, it turns out that if you find new subsidized health insurance enrollees by seeking out people too disconnected from the rest of society to have Social Security numbers, and advertising to people who used to have trouble getting medically underwritten coverage because they have cancer, hemophilia or HIV, many of those people will have high claims.
Amazing. Who could have imagined this?
And how was it possible for health insurers to guess that if, even in 2016, they would be setting rates without having much ACA World data, breaking even might be challenging?
Who woulda thunk?
Clearly, many people woulda thunk, and did think such thoughts.
One of the main, utopian goals of the ACA drafters was to find a way for sick people to get health coverage for about the same price as healthy people.
Just about everyone outside of the health insurance community likes that idea.
Hardly anyone outside of the major medical insurance field, even in the life insurance or auto insurance markets, has any patience at all for the idea that high prices should keep people with diabetes from getting commercial coverage, or that people with diabetes ought to make do with waiting for two or three years for expensive, limited “risk pool” coverage.
Many state efforts to eliminate medical underwriting have failed in the past.
The ACA individual health insurance market and public exchange provisions are as strange and complicated as they are because the ACA drafters knew they had to use every available tool to encourage and push healthy people to get covered to offset the claims of all of the sick people who’d get covered.
The drafters knew, in effect, that they were lifting the rug off of the bad part of the U.S. health care finance system, and that were would be many ugly, squirming roaches lurking there.
The ACA risk corridors program, the ACA reinsurance program, the ACA risk-adjustment program, the ACA individual coverage mandate, the ACA employer coverage mandate, the ACA exchange system, the ACA exchange plan premium tax credit subsidy system and the ACA exchange plan cost-sharing reduction subsidy program are all just a bunch of complicated statutory shoes to mash the bugs that were going to come crawling out once the rug came up.
Who’s to blame for all of the roaches now running all around the national policy living room?
The hard-left Democrats who refused to let Obama even to be polite to the Republicans in Congress in 2008, and forced him to back a health bill, H.R. 3590, that could not attract a single Republican vote in the Senate. Because of the hyper-partisan way the bill originally bill came to life, no one even had time to proofread it properly, and supporters have hardly been able to get even minor changes through Congress.
The Republicans who pretended that the ACA risk corridors program was a sweet deal for the insurance companies, not a safety net to protect them against the easily anticipated bugs likely to come out in any giant new program.
U.S. Department of Health and Human Services officials and, in some cases, state insurance regulators who pushed insurers to start out with crazy, low-baller rates, as if no one could remember that commercial health insurers appeared to be on the brink of a financial meltdown, partly because of underpricing, just 10 years earlier.
Insurance company executives who were too ignorant or too wild-eyed to recognize that “disciplined pricing” was as important in the strange new ACA individual health insurance market as in the group health market, or the group disability market.
Insurance company executives who knew very well that their individual health prices were too low in 2014 and 2015, but who let nondisclosure agreements or good manners keep them from blowing the whistle.
Another problem we have right now is the people who talk as if the conversation is about the survival of the ACA public exchange system.
Exchange shmexchange. Who cares? Companies such as eHealthInsurance.com invented the exchange concept in the first place. Why not just sell HealthCare.gov and the state-based exchange systems to those companies and let them run the whole shebang? No big whup.
The big question is whether the ACA limits on medical underwriting survives. Some Republicans, to their credit, at least talk about risk pools in their ACA replacer and ACA fixer proposals, but mighty quietly. Those aren’t the parts of their proposals they’re quick to brag about.
Fixing the health finance system by shutting poor people and sick people out might be practical and easy, but it’s not very attractive.
So, right now, the ability of poor sick people to have some kind of bare-bones health coverage and predictable access to care seems to be safe.
The underlying rate of growth in most kinds of health care, other than drugs, seems to be moderate.
What we have, mostly, are:
- Employers and their trade groups raging mad about federal government paperwork and audits.
- Non-poor individuals who are raging mad at insurers about their premiums.
- Insurers raging mad at individuals for not getting covered; government officials for being a bunch of noncommunicative, shifty jerks; drug companies for being self-destructively crooked thieves; and doctors and hospitals for hiding serious Medicare and Medicaid problems by shifting costs to commercial customers.
So, in other words: The ACA is actually started to work. People with lobbyists and the skills to send angry emails to their members of Congress are noticing that the health care system is broken and getting angry. Great.
I think the real ACA challenges are that:
The Obama administration officials seem to be thinking they’ve done a fine job of setting up and running ACA programs, and communicating with interested parties. One sign that this situation may be improving is if we start to see former ACA program runners appearing on TV talk shows and crying. Until they start crying on national TV, they are too happy with themselves.
Some Republicans think putting people with diabetes or a cancer in special risk pool plans that would be visible to the insureds is a minor little change. They want to have the personal satisfaction of saying they’re with Ayn Rand without actually having the fortitude to acknowledge that a true free-market approach to health care involves letting nice people who did nothing particularly wrong go without ordinary types of care.
Some hard-left Democrats still seem to think the idea that coming up with the cash to pay for what you want to do is a conspiracy theory, and that health care providers will work tirelessly, for years, for minimum wage and a few words of encouragement from the ghost of Edward Kennedy.
So, in my opinion, anger about ACA cockroaches climbing up the walls is good for us. The problem is that too many people involved with health policy are still happy.
Allison Bell is health channel editor for LifeHealthPro.com.
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