ACA Exchanges Open for New Enrollment: a Day of Reckoning at Hand?


This week’s health policy news roundup curated by Jane M. Orient, M.D.

According to Affordable Care Act (ACA or “ObamaCare”) architect Jonathan Gruber, ObamaCare is working just as intended. The main problem is that the mandate penalty (which is actually a non-mandate, non-penalty tax, according to the U.S. Supreme Court) is too small, in his view. If we could attract more low-risk people to sign up, premiums would fall, and insurers would flock to the market instead of leaving. The average 22% increase in premiums is not a crisis, he says, because it affects so few people. Most (85%) of the people getting insurance on the exchanges get a subsidy. There is “no sense…in which the law needs to be fixed.” But we do need to put more pressure on states to expand Medicaid, Gruber remarks.

But others think that if ObamaCare is working as intended, it was designed to fail.

In some places, the increase in premiums is much steeper than the 22%. Arizona expects a 116% rise, the largest in the country.

Half of the people with Exchange products report cutting back on care to manage costs.

The nearly 85% of people now getting subsidies may be insulated from the sticker shock—for now. But a somewhat obscure provision in Section 1401 of ACA specifies that once exchange subsidy spending exceeds 0.504% of GDP, Obamacare subsidy spending can only increase by a formula tied to inflation. The Congressional Budget office expects us to hit that trigger point sometime around 2023, states Avik Roy.

The Obama Administration refuses to reveal how many Exchange plans are disappearing. If subscribers don’t choose a new plan for themselves, the government will pick a plan for them, and count them as enrolled—until they fail to pay their first premium, states Michael Cannon.

As the number of participating insurers plummets, consumer choice is very limited. In 2017, about 21% of people will have access to only one plan. Brian Blase writes that “25% fewer insurers will be offering exchange coverage in 2017 than offered coverage in 2016. This decline is on top of the more than 25% reduction in the number of insurers offering coverage in the individual market between 2013 and 2016. Further, in 2017, the weighted average number of carriers participating in each county will be 2.9—a nearly 50% decline from 5.7 average carriers participating in each county in 2015.”

In most Arizona counties, only one insurer is selling exchange plans for 2017. Only last-minute maneuvering prevented one Arizona county from becoming the first in the nation to have no exchange insurers at all.

Anthem threatens to pull out in 2018 if results don’t improve.

While Barack Obama and Hillary Clinton like to talk about 20 million more insured Americans, a lower percentage of Americans have private health insurance now than in 2007, writes Jeffrey H. Anderson. But the percentage of people living in the U.S. who have public health coverage has risen dramatically, from 18.1% in 2007 to 25.3% in 2015. “In other words, Obamacare is a massive Medicaid expansion.”

In a desperate effort to keep insurers in the Exchanges (more than 40 have exited in the past two years), Obama is apparently resorting to an illegal “sue-and-settle” strategy to bypass the congressional ban on appropriations.

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