Let’s start with the basics. I saw a study that suggested many Americans didn’t know that the ACA and “Obamacare” were the same thing. The official name of the legislation passed during the Obama Administration is the Patient Protection and Affordable Care Act, which the media have nicknamed Obamacare.
The Republicans controlling the U.S. Senate, House, and presidency have vowed to make substantial changes to this legislation to undo the significant damage it has caused across our country. The House passed a bill by a slim margin, but that legislation has no chance, in my opinion, of passing the Senate. Even if Congress passed a new bill, it would not take effect until after 2018. So, for next year at least, we are stuck with the existing legislation (notwithstanding tweaks Congress could pass).
On the other side of the aisle, the left prefers what is known as “single-payer,” essentially a fully governmental approach to health care. Californian Democrats have floated the idea this year and determined that it would cost $400 billion per year. To put this in perspective, North Carolina’s entire state budget is about $45 billion. California has nearly four times the population we do, but this amount is still roughly double their entire state budget.
You may recall that Vermont came closest to single payer in 2014 when it had to drop the idea due to its exorbitant cost. To pay for it, legislators were considering an 11.5 percent payroll assessment on businesses and up to 9.5 percent tax on individual income. Essentially, they determined the cost would be about 21 percent of worker’s income. That’s a steep price to pay for a service most people will not use very much. Keep in mind that in 2016, 8.1 million people nationwide — approximately 20 percent of the people subject to the ACA’s individual mandate — were willing to pay fines totaling $1.7 billion to avoid receiving the benefits of Obamacare. I find that to be a staggeringly high number, although understandable given the cost of “affordable” insurance: In the 39 states (including North Carolina) using the federal government to run the exchanges, the average premium increase from 2013 to 2017 was 105 percent.
Blue Cross Blue Shield of North Carolina has requested a 22.9 percent rate increase for 2018 following a rate increase of 24.3 percent this year and 32.5 percent in 2016. Wow. Remember, all taxpayers pay for the subsidies, so even if you aren’t in Obamacare, you rack up a bill of $2,400 per year to cover its additional costs.
Insurance providers in some other states have already submitted their rates for 2018 and the story is the same as the past few years — massive price increases. Consequently, the “death spiral” of rising premiums and declining participation in Obamacare will continue apace in 2018. Several providers have already announced that they will withdraw from the exchanges in 2018. Blue Cross and Blue Shield of Kansas City, after losing $100 million, will no longer participate in Missouri or Kansas, forcing 67,000 people to find other coverage. Anthem, one of the largest providers in the nation, is publicly flirting with withdrawing.
Here in North Carolina, as of 2017 we are in an unusual situation. In 95 of our 100 counties, all of the providers have dropped out except for BCBS. It is never good when a law allows one company to operate a monopoly. In 2014 and 2015, BCBS lost more than $400 million on Obamacare customers. In 2016, it lost only $38 million. The biggest unknown the company is dealing with is that it absorbed over 200,000 new customers who switched because their previous providers left the exchange.
They are experiencing 65 percent higher costs from Obamacare customers than their other customers. The good news is that BCBS did not leave the market, which would have been catastrophic for North Carolinians. Could you imagine living in the middle of the state and being required by law to purchase insurance from a Virginia or South Carolina provider? I hope that day never comes.
Eric Dent is endowed chair professor of Ethics at Florida Gulf Coast University.