Obamacare Premium Increases Don’t Justify Repeal

Your Part 1 article (7/27/2017) on “Keeping Health Care in Montana” was useful, but did not help your read- ers understand recent premium increases in the subsidized health insurance markets created by the Affordable Care Act (ACA) (also known as Obamacare). Since many Republicans, including Senator Daines, point to premium increases to justify repealing the ACA, it’s impor- tant to take a closer look at those increases. • Nationally, relatively few people are in ACA insurance markets (approximately 11 million out of 282 million people with insurance under some program -- employer plans, Medicare, Medicaid or other govern- ment programs). Only ACA markets are affected by the premium increas- es. http://www.kff.org/health-reform/ perspective/the-aca-marketplace- problems-in-context-and-why-they- dont-mean-obamacare-is-failing/ • Around 85% of the people in ACA markets are protected from pre- mium increases by subsidies. • The premiums in ACA markets are in line with (perhaps a bit below) what the Congressional Budget Office predicted in 2009. Premiums went up more than expected in 2016 and 2017, but they were lower than expected in the early years of the ACA. See http:// www.kff.org/health-reform/perspec- tive/how-aca-marketplace-premiums- measure-up-to-expectations/ In Mon- tana, one suspects Blue Cross Blue Shield, whose premiums on the ACA market skyrocketed 23.1 % recently, kept premiums low early under ACA to gain market share, compared to Montana Health COOP, which is requesting a 4% increase. • The larger-than-expected premi- um increases at a national level in ACA markets in 2016 and 2017 were probably a one-time market correc- tion, as insurers figured out risks when they could no longer refuse to cover people with pre-existing condi- tions and adjusted for unrealistically low premiums during the early years of the ACA. See http://www.kff.org/ health-reform/issue-brief/individual- insurance-market-performance-in-ear- ly-2017/ • The ACA has moderated health premium increases for most Ameri- cans who are covered by employer plans (13 times more people than in the ACA markets). Republican pro- posals currently in Congress would likely de-stabilize the small group employer market and cause premiums to rise. http://www.kff.org/health- reform/issue-brief/association-health- plans-for-small-groups-and-self- employed-individuals-under-the-bet- ter-care-reconciliation-act/ The problems with the ACA are fixable. The irony is that the ACA’s basic competitive insurance market structure is Republican, in part because in 2009 Democratic moder- ates like our own Senator Baucus, chair of the Senate Finance Commit- tee at the time, tried to craft a bi-par- tisan bill, driven by the vain hope that by relying on competition among pri- vate insurers, the bill would attract both moderate Republican and Demo- cratic support in the end. The ACA was adopted after 14 months of nor- mal legislative procedure in both the House and the Senate, during which Republicans had plenty of opportunity for input. The irony of the utter inability of Republicans in Congress to agree on a bill to “repeal and replace” the ACA (after 7 years of pledging to do so, and months of failed behind-closed-doors negotiations among themselves, aban- doning normal procedure and any effort at bi-partisanship) is the grow- ing popularity (even among Republi- can voters) of “Medicare-for-all,” which is far less market-based than the ACA. And, of course, the ACA is gaining in popularity. One further irony is that, com- pared to the ACA, the Republican pro- posals available for analysis would increase premiums and costs to indi- vidually substantially, if you control for benefit structure and age, because they reduce benefits and shift costs to individuals. According to an Urban Institute analysis of the Better Care Reconciliation Act introduced in the Senate on July 20, for a 60 year old single Montana resident of Carbon County, making 200% of the federal poverty level ($24,720), their annual net premium plus deductible would be $10,130 (41 % of their income), com- pared to $2,510 (or 9% of income) under the ACA. http://www.urban.org/ sites/default/files/publication/92161/ montana_state_fact_sheet_7-21_final- ized.pdf Obviously, that 60 year old is not going to have insurance. Senator Daines should stop point- ing to the recent premium increases under the ACA to justify his unwill- ingness to join moderates in both par- ties in an effort to fix the ACA. None of us should believe that recent premi- um increases in ACA markets justifies the current broadside attack on the ACA, including by Senator Daines.

 

Submitted by Kathy Kenyon, JD, MA, Red Lodge. Kenyon was a senior policy analyst in the DHHS Office of the Secretary, Office of the National Coordinator on Health IT, 2009- 2015. She was also General Counsel of Billings Clinic from 1997-2005. Kenyon has a Law degree from Duke; and Masters degree in Sociology from Rut- gers.