ACA’s Future

People who were previously denied health insurance coverage in the Individual health insurance market, due to preexisting conditions, are now able to obtain it on a guaranteed issue basis, both on and off the ACA’s exchanges/marketplaces. So it comes as no surprise that the vast majority of enrollees to date are those who are sick or injured. In a typical risk pool, the costs of those with medical conditions are offset by those who are healthy. The problem is those who are young and healthy did not enroll in sufficient numbers during the ACA’s initial open enrollment period, for a variety of reasons. This disproportion will likely lead to premium increases for everyone in 2015 and beyond, unless certain aspects of the law change.

Many states allowed consumers to keep their (non-ACA-compliant) plans, for a predetermined period of time. The young and healthy predictably kept their plans and did not enroll in the exchanges. These individuals will likely see premium increases as their non-compliant plans will eventually be terminated and they will need to enroll in a plan that meets all of the ACA’s requirements.

To add insult to injury, the risk mitigation programs will eventually phase out. As the risk margin increases for insurers, so will premium costs for consumers.

Eighty-five percent of those who enrolled in the ACA/Obamacare exchanges during the initial Open Enrollment period qualified for federal subsidies. This is an indication that the cost of health insurance is too expensive. And unfortunately, it looks like coverage costs will continue increasing, again, if things don’t change.

The Congressional Budget Office (CBO) keeps it’s “finger on the pulse” of everything affecting our nation’s spending and health care is very high on this list, consuming nearly 1/5 of our total gross domestic product (GDP).  Earlier this year (2014), the CBO estimated that by 2024, there will be 31 million Americans without health insurance, of which 14 million (45%) will have the option of purchasing coverage, but choose not to.  For those interested in seeing the detailed/updated CBO analysis of the “Effects of the Affordable Care Act on Health Insurance Coverage“, here’s a link to the data – http://www.cbo.gov/publication/43900

There are provisions of the ACA that work toward the goal of making health insurance more affordable.  Yet there are numerous provisions that will have negative effects and actually result in fewer rather than more insured Americans.  The primary reason why people don’t purchase health insurance is because the price is too high.  Mandated benefits, community rating and a total ban on preexisting condition limits result in higher rather than lower premium costs.  Let’s hope bright and rationale minds can come together to implement positive changes.