I knew things would be bad, but I was not prepared for this.
Last year I saw a roughly 22% spike in my monthly health insurance premiums.
This year my insurer informed me that I’m looking at 36% increase on top of last year’s increase.
Given GOP interference with the law over the past year, it wasn’t hard to see this coming.
From the Kaiser-Family Foundation:
Insurers setting rates for health coverage options on the 2018 individual market have faced substantial uncertainty regarding whether or not the federal government would continue to make payments for cost-sharing reduction subsidies to insurers, as well as whether or not the administration would continue to enforce the Affordable Care Act’s individual mandate. Following the September 27th deadline for insurers planning to offer coverage on the ACA’s federal marketplace to finalize premiums and sign contracts, the federal government announced on October 12th that cost-sharing reduction (CSR) payments would end, effective immediately, unless Congress appropriated the funds. In some cases insurers also increased rates due to concerns that the individual mandate might not be enforced, although no formal change in enforcement has been announced.
Regardless of whether the federal government reimburses insurers for CSR subsidies, insurers are still legally required under the ACA to offer reduced cost-sharing via silver-level plans to low-income consumers with incomes up to 250% of the poverty level. Many insurers anticipated that the CSR payments might not continue and built the loss of payments into their premiums for 2018. In some cases, state insurance departments directed insurers what to assume regarding CSR payments, and in other cases regulators were silent. Some state insurance regulators approved two sets of rates, one to be used if CSR payments continued and another if they did not.
A number of other factors have contributed to the GOP sabotage of the ACA over the years.
1. For starters, as originally designed, every state was expected to expand Medicaid. Thanks to John Roberts and GOP Judges on the Supreme Court, a carve out was inserted into the ACA after-the-fact to allow states to opt-out of Medicaid expansion. States that didn’t accept the Medicaid expansion money didn’t make the cost for uncompensated uninsured care magically disappear. They just passed along those costs to consumers in the form of higher premiums, and higher tax bills in states that refused the expansion money.
2. In December 2014, Marco Rubio, was able to slip a rider into the 2015 budget, which eliminated reinsurance money, which has contributed to premium spikes in 2015 and 2016. Rubio actually bragged about doing this during the GOP debates. The reality is that millions of hardworking Americans got stiffed with higher costs because of his action.
3. In 2016, several health insurance companies abandoned markets in a failed effort to pressure regulators into accepting proposed mergers. These mergers might be revived under Trump, which is likely bad news for consumers — it’s a factor that looms over the ACA marketplaces in future years.
Trump and the GOP’s actions this year — the uncertainty over repeal, combined with the termination of cost-sharing money — has effectively levied a massive Trumptax on millions of middle class people. I had sticker shock. I’m sure millions like me will find out soon enough. For those who qualify for subsidies, a portion of those costs might be covered, but for many of us, there won’t be any relief, just extra financial pain.
It’s important that people know why that is. There are specific actions that Trump and his administration made that caused premiums to spike this year (see the block quote above). These moves may not even save any taxpayer money, since the practical effect of the move is that it is likely to increase the cost of insurance subsidies. So it was purely a jerk move.
So that’s how we got here. The problems didn’t begin in 2017, but there is nothing that Trump or the GOP did over the past few months that actually helped people with respect to the cost or quality of insurance plans.
In theory, one of the nice things about the ACA, is that you can shop around (at least in some markets), and comparison shop. When I received my rate increase notice this year, that was one of the hopes. Maybe I would go with a Bronze plan this year instead of Silver.
It was pretty depressing this year to see that I could basically match my 2017 premium expense with a different insurer, IF I opted for a $4,000 increase in my deductible and a Bronze plan.
I could also stick with the same insurer that I currently have and pay an extra $600 a year (in comparison to 2017) for a Bronze plan with a deductible that is $3,500 higher than my current coverage.
So, in my case at least, it looks like I will end up paying either a lot more for the same product that I had last year, or more for a product that is inferior to the one that I had.
I could also opt to not carry any coverage, and run the risk of being bankrupted by a medical emergency, as well as subject to the mandate tax. I have until December 15th this year to decide.
At a more fundamental level, I know that the ACA has done a lot of good for a lot of people.
On some level I’m glad that Obama and the Dems at least tested out this policy approach. In the future, when we are talking about the economics and politics of health care, we are outside of the realm of theory, and we can now see how this actually works in practice.
One lesson that is abundantly clear: any health care law that requires good faith on the part of the GOP and/or insurance companies rests on a flawed foundation. Frankly any law that contemplates a system of for-profit insurance plans and insurance market places is going to encounter these issues. They are problems inherent to the market concept.
There are things in the short-term that could be done to lessen the pain — at least for next year. The industry bailout discussed by Patty Murray and Lamar Alexander, would reduce consumer costs (e.g. specifically reinserting the reinsurance money that Rubio had cut in Dec. 2014, and adding back the cost-sharing money that Trump and the HHS cut in Oct. 2017). That’s good. It wouldn’t provide more value for taxpayers, but it would at least help on one side of the ledger with respect to people buying the insurance.
The idea of making a “public option” available — or Medicare buy-in — are approaches that would also reduce some of the pain for people buying insurance and would help guaranty access to insurance in every market (for those with the ability to pay).
It would also help if hold-out states accepted Medicaid money — and at least in a few cases, we might be able to get hold-outs to take some action. It’s a long-shot, but Virginia could be added to that list if the Dems maintain control of statewide offices, and make major gains in the General Assembly in the near future.
However, the experience of the past few years, leads me to believe that the only real solution to the problem is a fully taxpayer funded system along the lines of a universal Medicare system.
The GOP would have a much harder time gaming that system. Private sector interests, by their nature, are in the business of profit maximization. After the ACA passed, you would think that all of these provider groups — the insurance industry, pharmaceutical companies, etc — would be grateful for the new revenue stream and increased profits. Instead, they were greedy and spent more money electing the GOP to weaken the law in ways that favored their interests, rather than defending the law in the negotiated form. In doing that, they didn’t just elect Republicans to weaken the ACA, they effectively elected the GOP to enact all the other crappy policies that Republicans like to push when they are in power.
Personally, I don’t really like the idea that any portion of my insurance money is going to elect Republicans. I don’t like paying a premium so that lobbyists and legislators can work against my interests or the interests of friends, family and neighbors. A Medicare for All system would eliminate that problem.
So, as I think about what to do next, that reality hangs in the decision matrix.
I feel like these spikes are at least partly due to an industry that I have been shoveling money to for years and for its failure to maintain an imperfect but more equitable bargain than what we have now.
Rather than shoveling more money to the insurance industry this year, I’m tempted to run the risk of having no coverage in the short-term, and pumping more money into organizations and support for politicians who are focused on an actual long-term fix.
As far as everyone else goes, if people ask why it is they are being screwed over this year, make sure they know why. Maybe then, we can move policy in a direction that actually helps people.