There’s no free lunch. Not in life, not in business, and certainly not in government policy.
The proof comes in the tab that must be paid from a policy lauded by many as a great benefit: The Affordable Care Act, commonly known as “Obamacare.”
The health care legislation passed in 2010 by Congress without Republican backing created a network of market “exchanges” where those without health insurance could buy it. After numerous hiccups with the sign-up website, several court challenges, including two before the Supreme Court, and nearly constant attacks from GOP lawmakers, the law has settled into place, for better or worse. Even many of its detractors admit it’s not going anywhere soon, shy of Republicans gaining the White House and large majorities in both houses of Congress. Even then, it would be hard to take away policies upon which many now rely.
Obamacare’s supporters celebrate a drop in the percentage of uninsured Americans to 11 percent, with more than 11 million people gaining insurance through the marketplaces. No one denies that is a positive step and everyone’s goal, even if Republicans had been included in the law’s drafting. Getting more folks into doctor’s offices and out of the ER is preferable to sick people spreading germs and hurting productivity on the job and at school, running up unseen costs paid by all.
That said, the law’s many flaws are beginning to show.
The main worry is cost. With many more people signing up for insurance, and no option to deny them for pre-existing conditions, insurance companies are taking on more risk. When they reach the point where benefits paid can’t keep up with premiums earned, the prices go up. Companies taking part in Georgia’s marketplace are raising premiums by double digit percentages, up to 50 percent for some. The weight of those extra policyholders jacks up the cost of insurance for everyone.
The availability of affordable policies may dwindle after insurance giant Aetna recently decided to pull out of the marketplace in most states because the law was cutting into its profitability. Aetna claims it has taken a $430 million hit in pre-tax losses from the exchanges since January 2014. Another insurer, UnitedHealth, is cutting its participation in many states due to losses of $1 billion in 2015-16, and may leave the program altogether next year. Those two may not be the last as more insurers seek to avoid the sudden glut of high-risk policies.
The Obama administration’s hoped-for offset to such risks was the enrollment of more healthy young adults who couldn’t afford insurance before. But not enough of them have signed up so far to balance the ledger.
Lower-income Americans are able to qualify for subsidies to help pay premiums, which keeps policies affordable for them. But those who don’t receive subsidies are paying more, as is everyone with health insurance. The heavy cost of taking on the newly insured is being shared by everyone.
In addition, insurers are having to manage policyholders’ risk factors by being more proactive in monitoring their health, offering “discounts” for maintaining certain levels of blood pressure, body mass index, etc. Yet those really are just lower premium increases rather than actual savings and likely will become standard procedure, forcing many to pay a “tax” for unhealthy habits.
From an objective perch, the ACA appears to have one key benefit — the enrollment of millions into health insurance who lacked it before — but several inherent flaws that should be addressed. Like any major reform, the law needs to be improved or the high costs and reduced choices will undermine its positive aspects.
Many progressives eventually would prefer to replace a market-based system with a single-payer government entitlement. In fact, some cynics believe the ACA was designed to fail for that reason. But such an overhaul of a major industry could drive a hole in the economy while creating a massive and expensive bureaucracy. What may work in smaller European nations — and the jury is out on how well it does — seems an ill fit for a nation as large as diverse as the U.S.
Last week, the Greater Hall Chamber of Commerce held its annual Health Care Reform Seminar to measure how public policy is working in the industry. It’s a key topic for everyone but especially to many in Northeast Georgia, home to a growing population of aging baby boomers and a large and expanding health care industry.
In summing up the ACA, James Slotnick, assistant vice president with Sun Life Financial, predicted “small tweaks but not a major overhaul” to the health law, based on the assumption Hillary Clinton wins the White House. Her Republican opponent, Donald Trump, has vowed to repeal the law but would need a cooperative majority in Congress to do so.
Minor changes might be enough for the short haul, but therein lies the problem. Had a better-functioning federal government blended the best ideas from both sides of the aisle into a bipartisan, comprehensive bill, the benefits would be in place with fewer downsides. And when problems emerge, a Congress able to cooperate and compromise could fix them.
Clearly we don’t have such a Congress, and haven’t for some time. Our warring political parties turn every issue into a blunt weapon to be used against the other, making it impossible to pass effective new reforms, much less improve existing ones.
Until better leaders can be elected that will take a monkey wrench to Obamacare rather than make futile speeches for or against it, the law’s problems will mount and insurance costs will rise for everyone. And more providers will drop out of the system, leaving fewer choices.
It’s enough to make you sick — but only if you can afford to be.
NOTE: This editorial contains a correction from an earlier version that incorrectly stated Aetna's reported losses.
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