Of course, the Affordable Care Act exchange system could be doomed.
The system is supposed to start its fourth annual open enrollment period, for 2017 coverage, Nov. 1. That’s a week before Election Day.
It looks as if the full cost of the premiums will be about 25 percent to 30 percent higher for the 2017 coverage than for the coverage sold this year.
The number of issuers, and the number of issuers per plan, will be smaller.
The country will have a new president Jan. 31, when 2017 open enrollment ends, and the Senate will have a new majority leader.
Even if Hillary Clinton is the president, and Chuck Schumer is the majority leader, the exchange system could become a political orphan. If Donald Trump is the president, and the Republicans strengthen their hold on the Senate, the system could die a quick death.
But, on the other hand, whether you love the ACA exchange system and passionately want it to live, or you hate it and wish it had never stumbled to life in 2014, I think efforts to declare it dead are premature.
The number of issuers will be smaller in 2017, but, it looks as if the issuers with shrinking exchange footprints have been minor players in many of the exchange markets they’re leaving.
Prices will be quite a bit higher, but that’s partly because prices were obviously set much too low the first three years the ACA exchange system was in operation.
Planned changes in ACA support programs may account for about 5 percentage points to 7 percentage points of the 2017 cost increases. Maybe compensating for the crazy low prices of 2014 through 2016 added another 15 percentage points. If those estimates are correct, even in a state with a 30 percent average increase, only 8 about percentage points of the increase will be due to anything other than rule changes and a recognition that the old prices were dumb.
When the surviving issuers set their 2017 rates, they might have done a better job of designing products to control claim risk, building margins for error into the premiums, and sticking their tongues out at regulators who tried to bully them.
For the surviving issuers, the reduction in competition might help lower marketing costs and make predicting how the one remaining ACA risk management program, the ACA risk-adjustment program, will work.
The surviving issuers may also be better positioned to sell bare-bones coverage aimed at broke people with low quality expectations.
Agents and brokers note that the new coverage is awful, but maybe that’s partly because, in many states, the country let middle-income people have good coverage before 2014 by shutting poor people and sick people out of the system. Medical underwriting and uninsurance covered up a lot of rot.
Even if Republican policymakers are in full control of the House, the Senate and the White House in February, it’s possible that they might suddenly start procrastinating about killing the ACA exchange system once they realize that killing the system means that they have to touch all of those disgusting worms.
Note that Kentucky has a new Republican governor who swore to kill the state’s state-based exchange.Today, Kentucky still has a state-based exchange.
It’s possible that similar paralysis in Washington could help the exchange system stabilize and give the surviving issuers a chance to report modest profits.
If the next administration tries to run the HealthCare.gov part of the exchange system less like a Soviet-era department store, and at least as openly and flexibly as the exchange boards in California and Colorado are running their state-based exchange programs, then maybe the system will be stronger in 2018.
If that’s the case, insurers and exchange watchers still won’t have a clear idea of how well a reasonably well-run U.S. public exchange system could work, but at least they might have a chance to come back and give the concept a fair test.
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