Enrollment Falling Short
So far 11 million people have signed up for health insurance through the various exchanges. This might sound like a lot. It is not. Around 150 million people receive health insurance through employers. Another 66 million people receive through it through Medicaid and close to 55 million are enrolled in Medicare.
What is happening with Obamacare ?
More uninsured people have been covered by Medicaid expansion than through the Marketplaces, also called exchanges. This has occurred even though 19 states have not expanded Medicaid.
The many news stories about the Marketplaces may have given everyone the mistaken impression that problems in the Marketplaces affect them when they do not.
♦ The Marketplaces are an important part of Obamacare. It is true the Marketplaces have some troubles. But it is nothing that could not be easily fixed if our politicians worked together.
The Obama administration has made some proposals to try to address some of the concerns insurance companies have voiced. Unfortunately, those proposals will have to wait until the next president takes office.
Back in 2013, the Congressional Budget Office projected that 24 million people would enroll. Enrollment numbers are critical to the maintaining the viability of the Marketplace. Insurers are complaining about the difficulty of making a profit from plans sold on the exchanges.
♦ The problem lies not in just the number of enrollees but also in the health of the people utilizing the exchanges.
Aetna recently announced it does not plan to participate in a number of exchanges in 2017. Aetna cited financial losses due to too many sick people signing up and not enough healthy ones. Humana plans to exit several markets next year. United Health Care said it would remain in a few markets.
Leaving the Marketplaces runs the risk of being banned from returning for a number of years. At the beginning of 2016, Oregon kicked Moda Health out of their exchange due to a lack of sufficient funds. They will are barred from returning for 5 years. Should a major player like Aetna decide the Marketplaces are now more financially attractive, it is likely that they will get allowed back in without much question.
In fact, the Obama administration just proposed changing the 5-year ban stipulation. This proposal is not expected to be acted upon until after the presidential election.
♦ Critics are quick to say there are fundamental problems with the system. Republicans are using the withdrawal of insurance companies as a means to reignite the call for repealing Obamacare.
♦ Supporters argue that a lot has to do with insurance companies making the wrong choices. The Marketplaces are a new territory and many of the plans offered on the exchanges made the wrong assumptions causing the insurers to lose money. Given time market forces will correct the problems.
All is not as gloomy as the headlines make out. Blue Cross Blue Shield has not bailed out yet, in fact they are planning to enter a few more exchanges in 2017. Critics are complaining that BCBS may actually be taking advantage of the situation by asking for large premium increases of over 20% in some markets.
Why aren’t people enrolling?
The Affordable Care Act requires everyone to have health insurance or pay a penalty.
♦ The penalty has not proven to be a big enough stick.
♦ Another issue is the quality of the plans offered on the exchanges. Many of the plans come with huge deductibles.
Deductibles have always been a feature of health insurance but a lot of the plans on the exchanges have pushed the deductibles to the sky. That leaves the average person wondering why they should purchase something they would be frightened to use.
• Close inspection of plans offered in Georgia finds that almost all plans in 2016 quietly eliminated the copay for emergency room visits. This is a major shift of risk to the patient. What this means is that if one were to visit an emergency room all charges would be applied toward the deductible.
• Many of the plans offered have very a limited network of doctors and hospitals. A narrower network has been purposed as way to get health care costs down by encouraging doctors and hospitals to be more competitive. But for people looking to enroll many of these limited networks have become too constraining and as a result of small value.
♦ The premium tax credit can only be used to purchase a plan off the exchange overseeing your area. Unfortunately, many people do not know how to access the exchanges or are just confused about the requirements.
The exchanges are not all that complicated. If you read our articles and learn more about health insurance you will not have as much difficulty as you think.
The premium tax credit can be a really great way to subsidize your health insurance.
