Instability in Marketplaces Draws Concern on Both Sides of Health Law

By Robert Pear and Abby Goodnough
The New York Times, November 27, 2015

The latest turmoil in health insurance marketplaces created by the Affordable Care Act has emboldened advocates on both sides of the political spectrum, providing ammunition to conservatives who want to shrink the federal role and liberals who want to expand it.

UnitedHealth Group rattled federal officials when it announced last week that it was losing money in the insurance exchanges, saw no reason to expect improvements in 2016 and might pull out in 2017. Those concerns followed the collapse of 12 of the 23 nonprofit insurance cooperatives created with federal loans under the health law.

In addition, insurance markets in many states are unstable. Premiums are volatile. Insurers say their new customers have been sicker than expected. And the law is as divisive as ever.

Whether the problems in the marketplaces are just temporary setbacks for the law, as the White House contends, or signs of fundamental problems, as Republicans say, is not clear.

Arguments once made by Republicans as polemical debating points are now echoed by consumers who say they cannot afford to use insurance because of high out-of-pocket costs.

In applying for rate increases in 2016, many insurers filed data showing that they had lost money on their exchange business in 2014. To stop the losses and control costs, many have increased premiums and deductibles and other out-of-pocket costs, while reducing the number of doctors and hospitals available to consumers through their provider networks.

Conservatives want to let consumers buy policies with fewer mandated benefits, on the theory that such coverage would be more affordable. Some lawmakers say that insurers should be allowed to sell cheaper “copper” plans alongside the bronze, silver, gold and platinum plans available in the marketplaces.

Harvey J. Rosenfield, the founder of Consumer Watchdog, an advocacy group based in California, suggested that “maybe the government should step in and run the system as Medicare for all.”

“People are sticking their heads in the sand if they say there are not serious problems with the Affordable Care Act,” Mr. Rosenfield said, adding: “People who were previously uninsured are indisputably better off, but many people in the middle class are struggling. They are entitled to buy health insurance, but that is an empty promise if the number of doctors and hospitals in your network has shrunk and deductibles have soared.”

http://www.nytimes.com/2015/11/28/us/politics/instability-in-marketplace…

Instability. Shrinking networks. Soaring deductibles. These are characteristics of plans offered in the Obamacare insurance exchanges – features that are now contaminating employer-sponsored health benefit programs. What can be done?

We can stabilize choice in physicians and hospitals by eliminating the networks, providing patients with free choice of their health care professionals and institutions. We can eliminate instability in access caused by financial barriers to care by eliminating deductibles, copays and coinsurance. We can stabilize insurance coverage by mandating it while making premiums truly affordable for everyone.

The problem is that under the current model of financing care, the insurers cannot offer plans with affordable premiums without reducing patient access to care – precisely what networks and deductibles are designed to do.

As it turns out, even with these perverse measures most insurers are still losing money. Mounting losses only perpetuate and intensify instability since the insurers must make additional changes to ensure the success of their business model. Quite clearly, additional changes based on business decisions will benefit only the insurers while serving to the further detriment of patients.

Suppose we did reverse course and eliminated networks, excessive cost sharing, tiering of benefits, and other detrimental features of today’s health plans. The variable that would have to give is affordability of the insurance premiums. They would skyrocket. If we really want people to have affordable access to decent health care by correcting these problems, that means that the government subsidies would have to be greatly expanded  – both in the amount and in the size of the population that would be eligible. Basically, the government would be covering much of our care, except for the wealthy.

If we were to spend that much in taxes to support such a system, why would we perpetuate this very wasteful and dysfunctional model that we have? If we had any sense, we would demand an efficient, effective system that would ensure access for everyone – a single payer national health program (an improved Medicare for all). Until we do, learn to enjoy the torment of increasing instability in our health care.