This Is How Much Trump's Obamacare Sabotage Increased Health Insurance Costs
HuffPost Jeffrey Young,HuffPost
President Donald Trump’s decision to cut off billions of dollars owed to health insurance providers under the Affordable Care Act caused those companies to substantially increase premiums to cover their losses, according to an analysis published Friday.
President Donald Trump’s decision to cut off billions of dollars owed to health insurance providers under the Affordable Care Act caused those companies to substantially increase premiums to cover their losses, according to an analysis published Friday.
Nearly all the problems with ACA were self inflicted by Obama. He knew up front that it wouldn't work long term. All he wanted was to have the law live past his term in office then he could just finger point.I didn't write the article below and I included the author. Everything he says is very easily verifiable
How Obama knee capped his own health reform
by
Kimberly Leonard |
Sep 25, 2017, 12:02 AM
Democrats are fond of blaming Republicans for undermining Obamacare, especially as conservatives attempt to overhaul the law. But experts and insurers point out that while Republicans aren't blameless when it comes to the strength or fragility of the law, many of Obamacare's wounds were inflicted by the Obama administration itself.
The law struggled for years when Obama was in office, even though his administration created it. Many of the problems were the result of short-term fixes by the Obama administration through the use of executive decisions, waivers, and deadline extensions. These inflicted losses for insurers in the exchanges. Those decisions by Obama slashed choices for customers and hiked prices, especially for those who were not receiving federal subsidies.
The Obamacare law gives the secretary of Health and Human Services latitude to decide questions about open enrollment, customer outreach, and special enrollment periods. Leaving such issues up to a government healthcare agency meant experts could weigh in and provided flexibility and adjustment during the early years. This was arguably necessary, to a degree, experts say, given that the law overhauled the healthcare system and caused disruption for millions of people.
But some of the decisions that were made also injected instability into the insurance marketplace. Republicans and regulatory experts sometimes sued to prevent Obama's adminstratives, which they said overstepped the limits of presidential authority. This was particularly so when the president authorized federal payments to insurers, "cost-sharing reduction subsidies," without Congress making the necessary appropriation.
The way the law was written, and the executive actions heaped on top of that fragile structure, have made it easier to dismantle now that Obama is gone. The details of the law can change easily and significantly based on which political party is running the administration. Now many of the problems have been raised under President Trump, who does not want Obamacare to succeed but, rather, wants it to "implode" or be replaced.
"The current morass is in no small part due to the failure of Congress to protect its legislative authority over years of executive overreach," said Jonathan Turley, a law professor at the George Washington University School of Law. "Both parties have contributed to the rise of an uber presidency that can effectively negate or amend federal laws through executive orders. I have been a long critic of this trend and encouraged Congress to re-assert its inherent authority over both legislation and the purse. Presidents now wrongly treat bills passed by Congress as the start of the legislative process, subject to their unilateral corrections."
Insurers' struggles under Obama
Since Obamacare was made law, the White House and Congress have repeatedly changed the rules governing for insurers. Those moves have, for example, changed what types of plans insurers may sell, and withheld monies that insurers expected to receive under the law the way it was written, making it difficult for companies to profit and for customers to have access to the competitive market they were promised.
"Insurers can compete effectively in any game as long as they know the rules of the game from the start and as long as the rules don't change midway," said Greg Fann, a fellow of the Society of Actuaries.
But the rules did change. An early sign of trouble came during the first open enrollment period in 2013, when people began receiving cancellation notices about policies that did not meet Obamacare's requirements. They spoke out against Obama for breaking his oft-repeated promise that people would be able to keep their healthcare plans if they wanted to.
After that promise was proved false, the administration took action on Nov. 14, 2013, when the president
announced that some people who purchased plans between 2010 and 2013 could keep the plans they already had. These, known as the "grandmothered" option (grandfathered plans were purchased before 2010), didn't have some of the protections Obamacare offered, such as the guarantee of coverage for preexisting illnesses or coverage for a range of services that included maternity care and mental health. White House officials commonly referred to them as "junk" insurance.
But to many healthier consumers, lower prices coupled with some coverage for preventive care offered an appropriate tradeoff, so they kept them.
Insurers were furious with the decision. They had been selling Obamacare plans for six weeks and had months to go. They had to contend with the chaos that ensued after the launch of the healthcare.gov website, which is where customers were supposed to buy insurance, which didn't work after it went live.
And then, there were also deadline changes.
"After open enrollment had already begun, and after plans already began enrolling people, suddenly insurers had to go back and throw whole calculations out the window in terms of whom they thought would be enrolling," said a health insurance industry insider who asked to remain anonymous to speak candidly. "That screwed up projections."
Healthier people stayed on their grandmothered plans because they didn't have a strong incentive to pay more for a plan they didn't believe they'd need. As a result, insurers had too few healthy customers in relation to sicker customers, creating what is known as an unbalanced risk pool. Disproportionately sicker and more expensive customers enrolled through the exchanges.
In later years, the Obama administration continued to allow states to keep older plans, and the Trump administration allowed this again for next year. Some 1.5 million customers in
32 states who might otherwise buy Obamacare insurance are expected to keep their grandmothered plans in 2018.
"I think there was a misestimation of how price-sensitive people are when they are shopping for coverage," said Dania Palanker, assistant research professor at Georgetown University's Center on Health Insurance Reforms. "I think from a point of view of risk pools in the exchanges, that was problematic policy."
Customers in the exchange were more expensive to cover than insurers expected. One
study by Blue Cross Blue Shield Association found that in 2015, Obamacare customers cost an average of $559 a month compared to $457 a month for customers who get coverage through work, because people who purchase exchange plans see doctors and go to the hospital more often, and have more prescriptions.
The action on plans by Obama, intended to temper political backlash and give consumers more flexibility in the short term, sacrificed long-term stability and created uncertainty for insurers. It wasn't his only alteration to the law.
Obamacare called for many other decisions to be made as it was rolled out, but certain actions stood in the way of higher enrollment numbers, legal experts say. The first year, Obama delayed the employer mandate and provided waivers for people to side step the individual mandate that requires people to buy insurance or pay a fine. Then, Obama authorized cost-sharing subsidies to insurers without an appropriation from Congress. Insurers didn't know whether to continue assuming the payments would be made after a U.S. district judge last year ruled them unconstitutional. The Obama administration appealed the case, and it remains in limbo. Insurers continue to face uncertainty as the funds are being authorized under Trump, who has said he would consider cutting them off.
Josh Blackman, whose book
Unraveled: Obamacare, Religious Liberty, and Executive Power, details administrative actions under Obamacare, said he believes the exemptions to the individual mandate had a significant impact on the troubles the law faced.
"The failure to rigorously enforce the mandate has to be the biggest sabotage to the Affordable Care Act," Blackman said.
Invoking Texas Sen. Ted Cruz's partial shutdown of the government in 2013 in an effort to defund Obamacare, Blackman added: "Obama did worse than Ted Cruz ever did."
Administrative decisions played a role in shortfalls to the law's expectations. Early Congressional Budget Office estimates of Obamacare forecast that 24 million people would be enrolled in the exchanges by 2016. But by the end of open enrollment, 11.1 million had signed up for the plans.
About half of the shortfall can be attributed to employers not dropping people from their coverage and sending them to the exchanges, as had been anticipated, but the rest is attributed to people seeking alternatives or forgoing coverage.
For years, the most coveted customers have eschewed Obamacare plans: the healthy, young people who are too old to get coverage under a parent's plan. Analysts estimated that insurers lost about $5 billion through Obamacare in 2015, including big players such as Aetna, Humana, and UnitedHealth Group.
As Obama prepared to leave office and before the 2016 presidential election, insurers were
pulling out in droves and premiums on mid-level plans were expected to rise by 22 percent nationwide.
Customers also expressed dissatisfactions with the plans they had. In some cases, insurers are able to keep premiums at bay by narrowing their provider networks, but that means patients have fewer options for providers and face higher deductibles. The move, which may help an insurer's bottom line while still adhering to Obamacare's mandates, can be a struggle for patients as well as for doctors, who face lower reimbursement rates.
"Anytime someone's provider choice is not in their network it's a frustration, and a valid frustration, and will affect how they feel about the program," Palanker said. "The level of how detrimental it is to consumers comes down to a number of issues, including whether the network, while limited, is adequate."
All of these outcomes provided fodder for Trump to run on the promise of ending what he often called the "disastrous" and "failing" Obamacare.
The exchange market is projected to be even more diminished in 2018. Roughly 2.6 million Obamacare exchange customers live in counties where only one insurer is expected to sell coverage, though more insurers still could drop out.
And they continue to incur losses. Humana expects to lose
$45 million and Aetna expects to lose $200 million this year. Molina has lost
$230 million during the second quarter, some of which it attributed to the high costs of claims in the exchanges. Centene is one of few insurers that said it has profited under Obamacare, which it credits to having a model that is similar to its partnerships with Medicaid. It covers a small share of the market, roughly 1.2 million customers, but is planning to expand next year.
