Obamacare's Insurance Exchanges Are Self-Destructing––And That Is Why Obamacare Needs To Be Fixed In 2017
Jumat, 17 Agustus 2018
Obamacare,
Obamacare repeal and replace,
Repeal and Replace,
Republican Health Care Proposals,
Trump's Obamacare Replacement
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Obamacare was self-destructing the day before Donald Trump was elected, and the Republican victory, with their talk of "repeal and replace," has only accelerated things.
Aetna's CEO recently was purchased off of the exchanges––Obamacare compliant on and off exchange plans all have to be designed and rated the same.
We have seen the disastrous carrier by carrier 2015 results from the federal reinsurance jadwal that included both off-exchange and on-exchange business. We also know the off-exchange results were bad enough to produce the big 2017 rate increases. And, we do know that these off-exchange people don't get a subsidy and have to pay the full price these big rate increases developed for 2017. The easy prediction is to say that those increases have to be pushing a lot of healthy people, who don't now use their insurance, off of their coverage.
I can tell you that I have talked to a number of health plans that are telling me that when the big rate increases became effective on January 1, 2017, their off-exchange net enrollment shrunk between 15% and 35%. The carriers are also telling me that their off exchange medical loss ratios are just as bad as the on-exchange business. And, the Aetna CEO certainly knew about the medical loss ratio on his off-exchange block when he made his comments.
We won't know if 2017's big off-exchange cancellations are part of a death spiral in this half of Obamacare until we see a few years of data and can look back at the complete picture. But this does have all of the classic characteristics of a spiral––big rate increases pushing the people who don't need heath insurance this year off the jadwal leaving the sick people who do need it in a jadwal where those quitting now can be guaranteed of coming back next January if they get sick.
The Effort to Save Obamacare
Much is being made about all of the voters protesting that they do not want to lose their Obamacare health insurance plans.
The protests are understandable. If one of my kids was dependent upon the jadwal I might be right there with them.
We currently have millions of people who need this insurance and many millions who need the subsidies to keep it.
But here is the fallacy in their protests: Obamacare is failing right now. It is an illusion to think we can keep what we were promised when it launched. How many states will not have a carrier in 2018? How many markets will have only one choice? How many states will see their Blue Cross plan remain––most of the for-profits are already gone––but with another round of big rate increases pushing still more unsubsidized consumers out of the program?
Those that frame this debate as the simple binary choice of either keeping these people covered under the current plan with minor changes or letting the Republicans kill it are doing everyone a disservice.
My own opinion includes two conclusions:
Today we have almost 20 million people in the Obamacare compliant individual health insurance market that now depend on a jadwal in self-destruct mode.
At the end of the day, both Democrats and Republicans will have no other alternative but to fix it.
My CNBC op-ed on how Obamacare could be fixed.
Aetna's CEO recently was purchased off of the exchanges––Obamacare compliant on and off exchange plans all have to be designed and rated the same.
We have seen the disastrous carrier by carrier 2015 results from the federal reinsurance jadwal that included both off-exchange and on-exchange business. We also know the off-exchange results were bad enough to produce the big 2017 rate increases. And, we do know that these off-exchange people don't get a subsidy and have to pay the full price these big rate increases developed for 2017. The easy prediction is to say that those increases have to be pushing a lot of healthy people, who don't now use their insurance, off of their coverage.
I can tell you that I have talked to a number of health plans that are telling me that when the big rate increases became effective on January 1, 2017, their off-exchange net enrollment shrunk between 15% and 35%. The carriers are also telling me that their off exchange medical loss ratios are just as bad as the on-exchange business. And, the Aetna CEO certainly knew about the medical loss ratio on his off-exchange block when he made his comments.
We won't know if 2017's big off-exchange cancellations are part of a death spiral in this half of Obamacare until we see a few years of data and can look back at the complete picture. But this does have all of the classic characteristics of a spiral––big rate increases pushing the people who don't need heath insurance this year off the jadwal leaving the sick people who do need it in a jadwal where those quitting now can be guaranteed of coming back next January if they get sick.
The Effort to Save Obamacare
Much is being made about all of the voters protesting that they do not want to lose their Obamacare health insurance plans.
The protests are understandable. If one of my kids was dependent upon the jadwal I might be right there with them.
We currently have millions of people who need this insurance and many millions who need the subsidies to keep it.
But here is the fallacy in their protests: Obamacare is failing right now. It is an illusion to think we can keep what we were promised when it launched. How many states will not have a carrier in 2018? How many markets will have only one choice? How many states will see their Blue Cross plan remain––most of the for-profits are already gone––but with another round of big rate increases pushing still more unsubsidized consumers out of the program?
Those that frame this debate as the simple binary choice of either keeping these people covered under the current plan with minor changes or letting the Republicans kill it are doing everyone a disservice.
My own opinion includes two conclusions:
- The Republicans will never have the votes to pass their least conservative version of "replace," much less the hard line proposals coming from the most conservative members, and they will ultimately have to work with Democrats to fix it.
- The Democrats can't just keep defending a failed jadwal by misleading people into thinking that Obamacare is fundamentally sustainable and can be kept––this thing is in the process of self-destructing and they will ultimately have to admit that and work with Republicans to fundamentally fix it.
Today we have almost 20 million people in the Obamacare compliant individual health insurance market that now depend on a jadwal in self-destruct mode.
At the end of the day, both Democrats and Republicans will have no other alternative but to fix it.
My CNBC op-ed on how Obamacare could be fixed.
