The Affordable Care Act, also known as Obamacare, became law in 2010. The ACA imposed a number of mandates affecting individuals, employers, and health insurance companies. For example, under Obamacare individuals and families must buy approved health insurance or pay a penalty.
Obamacare forces insurance companies to sell people health insurance regardless of pre-existing health conditions. The law also forces young and healthy people to pay more for insurance and older, sicker people to pay less than they would in a true, risk-based free market.
In 2014, the ACA created health insurance exchanges where individuals and small groups can buy approved insurance using taxpayer subsidies. Older, sicker people and not young, healthy people are using the exchanges. The architects of Obamacare estimated that young, healthy people needed to make up at least 40 percent of the exchange market to financially support people who were sicker. This goal is not being met.
Because of ever-rising premium costs, relatively low penalty costs, unwanted benefit mandates, and the ability to sign up for insurance after they become ill, the young and healthy only account for less than 30 percent overall in this marketplace.
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Our state Insurance Commissioner Mike Kreidler recently announced the new premium rate schedule for 2018 in the individual and exchange markets. Eleven carriers will offer 71 plans compared to 13 companies that offered 154 plans in 2017. Of these 11 companies, five will have insurance plans outside the state Obamacare exchange, four will offer plans exclusively in the exchange, and two companies will offer plans both inside and outside the exchange.
Choices for consumers have become further restricted. Residents in six counties in Washington state will have only one insurance company from which to choose and residents in one county, Klickitat, will have no carrier offering plans in the exchange and individual market.
The annual premium rate increases for our state announced by the Insurance Commissioner range from 12.9 percent to 38.5 percent, with an average increase of 22.3 percent (inflation is 1.9 percent).
Last year, when the average premium increase was 13.6 percent, Insurance Commissioner Kreidler predicted the state would experience a leveling-off of premium increases.
The Commissioner has defended previous rate increases by saying that almost half the people in Washington state receive their health insurance through their employers and consequently won’t be affected by the rate hikes. However, the premiums in the employer market are rising many times faster than inflation and the cost of living.
These employer-paid rate increases are a direct result of the regulations and mandates in Obamacare. When employers must pay more for health coverage, they have less money for pay raises and other employee benefits.
Supporters of Obamacare continue to blame the increase in premium rates on the uncertainty of health care reform in Washington, D.C. The reality is very different.
Supporters of Obamacare, including Commissioner Kreidler, have had seven years to make the ACA work for Washington state citizens and haven’t been able to do it.
Supporters promised families would save $2,500 a year on health premiums, instead premiums keep going up.
Supporters claimed the ACA would provide universal health insurance coverage. To date, only 40 percent of those uninsured in 2010 are now insured.
Supporters claimed Obamacare would bend down the ever-rising cost curve of health care. Last year, the country spent 18 percent of the economy on health care. With the ACA in place, the country is on track to spend 21 percent of the economy on health care by 2020.
Health insurance companies set their premium rates for 2018 based on existing law.
Although health care reform uncertainty exists in Washington, D.C., the trend of increasing premium costs and fewer insurance companies in our state is a direct consequence of Obamacare.
The ACA continues to negatively affect all segments of our health care system. The individual market is in a death spiral.
The two options at this point are a huge infusion of taxpayer dollars to bail out Obamacare or repealing it and start over with an affordable, consumer-based health care delivery system.
Dr. Roger Stark is a retired cardiac surgeon and a health care policy analyst at the Washington Policy Center, a nonprofit, nonpartisan research organization with offices in Tri-Cities, Spokane, Seattle and Olympia. He is the author of numerous health care studies including The Impact of Federal Health Care Reform on Washington State and the book “The Patient Centered Solution.” Stark has testified before Congress on Medicaid, the state health insurance exchanges, and co-ops in the Affordable Care Act.