|President Barack Obama
When President Obama began his push to pass the Affordable Care Act, he talked a lot about reducing the cost of insurance to individuals, to employees and to employers. That hasn’t happened.
Now prices are rising, not as many people are signing up as anticipated and many insurers are reconsidering whether they want to participate. That has led President Obama to work furiously to convince them otherwise and to save his administration’s biggest accomplishment.
Since ObamaCare’s passage in March of 2010, rates have continued to rise and — worse — employees are now picking up a higher percentage of their employer’s health insurance tab. The Kaiser Family Foundation said the average annual premium shared by employers and employees jumped 3% this year to $18,142. That’s double what coverage cost in 1999.
• Premiums for families have gone up 20% over the last five years.
• Earnings have gone up just 11%.
• Inflation is up 6% in the same time frame.
• Workers are paying an average of 18% for individual coverage and 30% for families.
• Deductibles on average run about $1,000 a year.
For the last year statistics like that have made many wonder about the wisdom of keeping the Affordable Care Act. Add to that — as noted earlier — insurers dropping out of the ObamaCare exchanges at an alarming rate or are considering giving up.
Part of that problem is because the reinsurance program set up in the law has expired. It was designed to help insurance companies with financial losses in the program’s first few years. But too many unhealthy people signed up and too few healthy people did the same.
That meant the reinsurance price tag became much higher than expected.
Two years ago Republicans noted the program wasn’t taking in enough money to cover the payouts so they put a provision in a funding program that said the Obama administration could not shift funds from other areas to make up that difference. In the end the shortfall hit $2.5 billion and insurers got just 12.6% of the money owed.
Democrats — including President Obama — are regretting not fighting harder to exclude the provision. But some say it wouldn’t have mattered anyway. There is no way the administration could get enough money from the Medicare and Medicaid account’s $4 billion to offset the losses.
Washington Democrat Rep. Jim McDermott is the ranking member of the House Ways and Means Committee’s health subcommittee. He said, “The president could have vetoed it, but it was buried in other things. That’s one of the problems, when you get these bills and they’ve got 20 provisions and 18 are OK. So that’s how they got through it.”
The loss of insurers has President Obama concerned. He’s so worried that he summoned a dozen health insurance industry execs to the White House early last week. They included Humana’s CEO Bruce Broussard and Cigna’s CEO David Cordani. Joining them from his staff was Health and Human Services (HHS) Secretary Sylvia Mathews Burwell and Obama advisor Valerie Jarrett.
The president’s goals were two-fold:
1) To underscore the importance of continuing a law the president says has brought the rate of uninsured to record low levels.
2) To find ways to strengthen the marketplace — or exchanges as most of you know them as.
Obama also sent a letter to insurers who will continue to offer plans on HealthCare.gov and on the exchanges run by the states. In the president’s words, the letter was to “emphasize the Administration’s commitment to working with them [insurers], discuss recent actions to further strengthen the marketplace, and ask for their help in signing up uninsured Americans.”
In the letter Obama said the progress that has been made has not been made without challenges. “Most new enterprises have growing pains and opportunities for improvement. The marketplace, while strong, is no exception. Time and experience will help drive that improvement, as well constructive policy changes,” the president wrote.
Clare Krusing of America’s Health Insurance Plans (AHIP) said the meeting “was focused on how to build on the continued progress in reducing the uninsured rate and moving forward with policy solutions that will support a stable, affordable market for 2017 and beyond.”
Republicans note the high premium hikes for 2017 and how it’s a sign ObamaCare is doomed. They also continue to criticize ObamaCare and call for its repeal. To counter, the administration is desperately working on getting younger, healthier people to enroll.
One idea is the Millennial Outreach and Engagement Summit which will be held later this month. The goal is to get the attention of Millennials and to get them to support the president and his signature achievement. “Since the remaining uninsured are disproportionately younger and healthier, signing them up improves the risk pool and consequently the affordability of coverage for all enrollees,” Obama wrote.
BlueCross Blue Shield’s CEO Scott Serota said it’s important for all of us to work toward making sure there are affordable health care options in this country. “To achieve this, the rules must encourage people to be continuously insured so they get the ongoing care they need. We continue to work with the administration toward this critical goal,” he said.
Conspicuously absent from the meeting — however — was executives from Aetna and UnitedHealth.
And if Obama’s efforts don’t work? The president has also suggested a government option. That — for those not knowing — is a government insurance company.
The idea has the support of Democratic presidential candidate Hilary Clinton and other key Democrats like Sen. Chuck Schumer of New York, Illinois Sen. Dick Durbin and Washington’s Patty Murray.
Oregon Sen. Jeff Merkley is one of the leaders of the movement. He said, “The Affordable Care Act has already expanded health coverage to millions who were previously uninsured and given countless Americans greater peace of mind. We should build on this success by driving competition and holding insurance companies accountable with a public, Medicare-like option available to every American.”
Is it a good idea? Maybe says the Congressional Budget Office (CBO). In 2013 it looked at the public option and concluded it could “reduce federal budget deficits by $158 billion through 2023.”
Yale University’s insurance expert Jacob Hacker agrees with the CBO. He said, “A public-insurance plan for working-age people that could compete with private insurers and use its bargaining power to push back against drug-makers, medical-device manufacturers, hospital systems and other health-care providers.”
Source links: Insurance Journal, The Hill, Insurance Business America, Employee Benefit Advisor, OregonLive.com