Whatever our future may be, big government healthcare or big corporate healthcare seem to be the only viable choices.
United Health Group, the largest health insurer in the U.S. announced lat April that it is pulling out of most states’ Obamacare exchanges. The company said it has lost about $1 billion in losses over the past two years in its business on the health insurance exchanges created by the Affordable Care Act.
The problem faced by United is that customers who signed up via the marketplaces are sicker
So, seven years into Obama, his opponents offer only magic as alternatives ot the ACA. Cruz proudly spouts repeal. OK, then what? Economists agree that without some major reform health care costs would bankrupt the US. Bernie is nto much better. Single payer, even if it could pass the Congress, would be an administrative nightmare.
and more expensive than the pre-Obamacare policyholders. This was inevitable in any system that combined a free market with price regulation. Fewer sick people, especially older people, choose to opt out.
This announcement and warning signs from other health insurers shows what a single payer system would fail unless every citizen was required to pay into the pool. That approach would inevitably require cost controls because there is no incentive for providers to limit health costs. Why is this good news? The design of the ACA was to force our Rube Goldberg system into some sort of common model that could insure all Americans. The existing system, not just of payers but of providers, is too complex for any simple solution. A government effort to reform the entire system wold have created chaos, even if we did not have to worry about the troglodytes known as the GOP.
Put another way, Obamacare is an inelegant effort to combine our free market systems with universal healthcare. His health care overhaul has extended health coverage to an estimated 20 million people and brought the uninsured rate to an all-time low. Obama achieved this while intentionally creating a market driven disruption to a broken system. The hope is that market dynamics will create a regulated, subsidized health market
Will this disruption create a workable system that contains costs? The process is slow. Costs for many individuals, including Ted Cruz, will go up. The real issue is total costs for all of our healthcare and the viability of a private insurance market. United Health’s exit will cost them market share of the close to 13 million people who have obtained private health insurance obtained via the exchanges. United Health is a relatively minor player. Despite offering plans in more than 30 states this year, the company’s approximately 800,000 exchange customers represent only a 6 percent national market share. More worrisome is that other insurers, including Humana and Blue Cross Blue Shield of North Carolina, also have publicly weighed ending their participation in the exchanges because of losses related to attracting too many sick customers and too few healthy ones.
Debunking Republican Health Care Myths
The evidence, nonetheless, is that the ACA is driving changes that do restrain cost. Healthcare inflation has greatly decreased. Providers, like Seattle’s Providence/Swedish merger are creating health care delivery networks designed to compete with existing large systems like those offered by Mayo Clinic, the Cleveland Clinic or Kaiser Permanente. Aetna, until now a payer, is seeking federal approval to merge with Humana, a payer and provider. Anthem is seeking government approval to combine with Cigna. Whatever else our future maybe, big government healthcare, or big corporate healthcare seem to be the only viable choices.
The Obama administration has taken some steps to address insurer concerns, including imposing new requirements consumers must meet to sign up outside the annual enrollment period, and Congress reduced the cost pressures facing insurers by blocking an Obamacare tax on the companies next year. The administration is severely limited in what it can do to address the underlying issues, beyond outperforming itself in enrolling more healthy consumers for next year. The White House has proposed policies designed to make the Affordable Care Act function more smoothly, but they have been ignored by the Republican-controlled Congress.
Though not an expert myself, I do favor adding one thing to Obamacare: a national government backed plan as an alternative. We actually have that here in Washington State, it is called “Uniform” and is available to all state employees. Uniform is actually run by Blue Cross, but saves money because Uniform can use state credit for underwriting, gets no other subsidy and, of course, Uniform makes no profit.
The GOP, meanwhile, remains focused on repealing the law and replacing it with a still-unknown plan of its own.