Instability in Marketplaces Draws Concern on Both Sides of Health Law
By ROBERT PEAR and ABBY GOODNOUGH
NOV. 27, 2015 - The New York Times
WASHINGTON — The latest turmoil in
health
insurance marketplaces created by the Affordable Care Act has emboldened
advocates on both sides of the political spectrum, providing ammunition to
conservatives who want to shrink the federal role and liberals who want to
expand it.
UnitedHealth Group rattled federal
officials when it announced
last week that it was losing money in the insurance exchanges, saw no reason
to expect improvements in 2016 and might pull out in 2017. Those concerns
followed the collapse of 12 of the 23 nonprofit insurance cooperatives created
with federal loans under the health law.
In addition, insurance markets in
many states are unstable. Premiums are volatile. Insurers say their new
customers have been sicker than expected. And the law is as divisive as ever. In
the latest
poll by the Kaiser Family Foundation, people reporting unfavorable views of
the law outnumbered those with favorable ones, 45 percent to 38
percent.
Conservatives take the trends as
confirmation of their pessimistic forecasts, another reason to repeal as much of
the Affordable Care Act as they can. Liberals, on the other hand, say the uneven
performance of private insurers strengthens the case they made unsuccessfully in
2009-10 for a gpublic optionh — a government-run health plan that would compete
with private insurers.
Whether the problems in the
marketplaces are just temporary setbacks for the law, as the White House
contends, or signs of fundamental problems, as Republicans say, is not
clear.
The Obama administration has
repeatedly cited one important statistic in efforts to show the success of the
health
care law: More than 17 million uninsured people have gained coverage since
Congress adopted the law in 2010 with no Republican votes in favor. And the law
has cost the government less than projected, in part because spending on most
types of health care has grown more slowly than expected.
But Republicans say that
UnitedHealthfs concerns show that the health law is unsustainable. Arguments
once made by Republicans as polemical debating points are now echoed by
consumers who say they cannot afford to use insurance because of high
out-of-pocket costs.
Sylvia Mathews Burwell, the
secretary of health and human services, surprised supporters of the law last
month when she
predicted a small increase, to 10 million, in the number of people who would
have marketplace coverage at the end of 2016. At the end of June, 9.9 million
were enrolled.
The projection alarmed some
insurers because it implied that they would not see an influx of healthy people,
whose premiums could help defray the cost of care for sicker people in a
well-balanced grisk pool.h
In applying for rate increases in
2016, many insurers filed data showing that they had lost money on their
exchange business in 2014. To stop the losses and control costs, many have
increased premiums and deductibles and other out-of-pocket costs, while reducing
the number of doctors and hospitals available to consumers through their
provider networks.
Conservatives want to let
consumers buy policies with fewer mandated benefits, on the theory that such
coverage would be more affordable. Some lawmakers say that insurers should be
allowed to sell cheaper gcopperh plans alongside the bronze, silver, gold and
platinum plans available in the marketplaces.
gObamacare piled mandates on the
insurance industry that drive up costs and force many people to buy insurance
that is more than they want or can afford,h said Senator John Barrasso,
Republican of Wyoming. gThe only people who are consistently signing up are the
ones who get subsidies from Washington.h
But liberals draw a different
lesson from insurersf troubles.
gWith the news that United
Healthcare may drop coverage, itfs further proof that we need to implement a
public option,h wrote Representative Jan Schakowsky, Democrat of Illinois, last
week in a
post on Twitter.
Harvey J. Rosenfield, the founder
of Consumer Watchdog, an advocacy group based in California, suggested that
gmaybe the government should step in and run the system as Medicare
for all.h
gPeople are sticking their heads
in the sand if they say there are not serious problems with the Affordable Care
Act,h Mr. Rosenfield said, adding: gPeople who were previously uninsured are
indisputably better off, but many people in the middle class are struggling.
They are entitled to buy health insurance, but that is an empty promise if the
number of doctors and hospitals in your network has shrunk and deductibles have
soared.h
In Colorado, unhappiness with the
law has added momentum to an effort to replace it with a government-run health
care program that would largely cut private insurers out. The initiative
qualified for the 2016 ballot this month after supporters submitted over 158,000
signatures.
State Senator Irene Aguilar, a
Democrat, said frustration with rising premiums and deductibles had fueled
disillusionment, as had the recent collapse of a nonprofit cooperative that was
the most popular insurer on the Colorado exchange.
The new system would be expensive,
raising $25 billion a year in revenue from a 6.67 percent payroll
tax on employers and a 3.33 percent tax deducted from workersf
paychecks.
gI like to say the ground has been
tilledh by the Affordable Care Act, Ms. Aguilar said. gPeople have a better
understanding now of the limitations of trying to do health coverage in the same
way wefve always done it.h
This monthfs Kaiser poll found
that Democrats remained largely supportive of the health law. But some, like
Mark Kaley, a small-business owner in Indianapolis, say they are increasingly
angry at the private insurers selling plans through the exchanges.
Mr. Kaley said that he and his
wife had gincredibly expensiveh coverage from UnitedHealth this year, using the
federal exchange even though they did not qualify for premium subsidies.
gWhere is my premium payment
going?h Mr. Kaley asked. gIf itfs providing more health care to people who
didnft have it before, then Ifm O.K. with it. But if itfs going to a private
insurance company who wants to pay larger dividends to its shareholders and
salaries to its executives, Ifm not happy.h
Referring to the health law, Mr.
Kaley said: gAre there upsides to this? Yes. Were people in some way sold an
optimistic view that is not panning out? Yes. People are angry and frustrated
with that. The kinds of coverage and care they hoped they would have are just
not there.h
Thomas M. Harte, an insurance
agent in Hampstead, N.H., and a former president of the National Association of
Health Underwriters, said that New Hampshire residents had clearly benefited
from the Affordable Care Act in some ways. In 2014, he said, insurance was
available from only one carrier, Anthem. But now, he said, consumers also have
several additional choices, including Harvard Pilgrim and the nonprofit
cooperative insurance plans based in Maine and Massachusetts.
gAnthem is reducing its premiums,h
Mr. Harte said. gOther plans are fighting for market share.h
On the other hand, Mr. Harte said:
gEmployers are outraged about the burden of having to report to the Internal
Revenue Service on the insurance coverage they provide to each of their
employees. The amount of effort they spend to comply with the reporting
requirements of health
care reform is truly unbelievable.h