Regrettably, my least favorite topic, the Affordable Care Act is back in the news.
First the good news: Nearly all of the job loss that the law caused has already happened.
The bad news: Millions of people will be forced to change doctors and medical facilities on top of paying substantially more for their insurance next year. In short, 2017 is looking like another horrible year for our health insurance system.
UnitedHealth Group, the largest insurance provider in the country, is exiting almost all state marketplaces. Humana, another large insurance carrier, is also exiting a large number of states.
Blue Cross Blue Shield, the largest provider by far in North Carolina, announced this week that they are requesting an average increase of 18.8 percent.
Last year, the company increased rates in North Carolina by about 25 percent. In 2015, Blue Cross Blue Shiled lost $400 million in North Carolina.
Aetna is requesting an average 24 percent increase. UnitedHealth Group is leaving North Carolina, but Cigna is planning to enter the market.
A couple of other states have their insurance policy premium increase proposals from the insurance companies for 2017. Virginia providers have requested increases ranging from 9.4 percent to 37.1 percent. New York providers have requested increases ranging from 6.1 percent to 89 percent, with an average of 17.3 percent.
Remember how 26 states also set up nonprofit insurance providers and how most of them have already gone bankrupt, losing billions of dollars? Well, eight of the 11 that remain are at risk of going bankrupt before the end of the year.
In 2013, 395 insurers nationwide were offering policies on the exchange. Three years later, only 287 remain, a drop of 27 percent. Expect that number to drop even more in 2017.
Now consider the millions of people who were once covered by these insurance companies that now have to change doctors, cancer treatment providers and everything in between.
So far, only two states have their insurance policy premium increase proposals from the insurance companies for 2017. In North Carolina last year, Blue Cross Blue Shield increased rates by about 25 percent. If they decide to continue offering insurance policies in the individual marketplace, their customers are likely to see a double-digit increase, since Blue Cross Blue Shield lost $400 million here in 2015.
Virginia providers have requested increases ranging from 9.4 percent to 37.1 percent. New York providers have requested increases ranging from 6.1 percent to 89 percent, with an average of 17.3 percent.
The problem, of course, is the tremendous cost of all of this. Not only that, but we have to remember how little has turned out in the way it had been promised. By 2016, more than 21 million people were supposed to be covered. Today, only about half of that number are covered.
The “young invincibles” (i.e., young, healthy people) were supposed to participate even though they use very little health care, but their enrollment numbers haven’t met expectations.
The penalty for not having “mandatory” coverage does not increase in 2017, so the cost of forgoing coverage will look less expensive relative to the highly inflated premiums for 2017. Surprisingly, new enrollees in 2015 had higher levels of spending than those who enrolled in 2014.
Obviously, people who have chronic illnesses resulting in large health-care expenses were expected to get covered right away. Although it seems that people are “gaming the system.”
One way is that the Affordable Care Act requires a person to be covered for three months after they stop paying monthly premiums. Another is that people can get insurance when they need it, and discontinue it when they don’t. That is a high-risk strategy for acute health conditions such as a heart attack, but works well for chronic conditions such as cancer — but it isn’t a strategy I would recommend to anyone.
The lack of revenue has not only bankrupted the nonprofit exchanges and caused the for-profit companies to withdraw, it has also prompted lawsuits against the federal government. The Affordable Care Act includes “risk corridors” so that highly-profitable companies would put money into a fund to help less profitable companies.
Unfortunately, there were no highly-profitable insurance companies. Consequently, Highmark Health is suing because it expected $223 million in losses to be reimbursed, but they were not.
If you have employer-provided health insurance, you may think you don’t need to worry about any of this. But keep in mind that the Affordable Care Act is a new entitlement program with a sticker-price of at least $24,000 over a 10-year period for every typical family in America.
You may not need to worry about what happens with the Affordable Care Act, but you still have to pay.
Eric Dent is a business professor at Fayetteville State University who lives in Lumberton.