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The A.C.A.’s Premium Increases Are a Fixable Problem Affordable Care Act Premium Increases Are a Fixable Problem
(35 minutes later)
The Affordable Care Act has improved and expanded health insurance to cover millions more Americans. But it is far from perfect, and the sharp increase in premiums for plans sold under the program shows some of the problems that the next president and Congress need to fix.The Affordable Care Act has improved and expanded health insurance to cover millions more Americans. But it is far from perfect, and the sharp increase in premiums for plans sold under the program shows some of the problems that the next president and Congress need to fix.
Premiums will increase by 25 percent on average for midlevel plans next year, according to the Department of Health and Human Services, but most Americans will be largely insulated from price increases by federal subsidies. About 85 percent of the 10.5 million people who bought insurance through the online health exchanges this year received subsidies; that proportion is likely to increase in 2017 as premiums rise.Premiums will increase by 25 percent on average for midlevel plans next year, according to the Department of Health and Human Services, but most Americans will be largely insulated from price increases by federal subsidies. About 85 percent of the 10.5 million people who bought insurance through the online health exchanges this year received subsidies; that proportion is likely to increase in 2017 as premiums rise.
Premiums are going up because many insurers underpriced plans when they started selling policies in 2013; not enough healthy, younger people signed up; and those who did used more medical care than the insurers had anticipated. As a result, companies like UnitedHealth and Aetna have stopped selling health plans in many parts of the country and the providers that remain have raised prices. Premiums have gone up most in states like Alabama, Arizona, Oklahoma and Tennessee that have three or fewer insurers selling Affordable Care Act plans.Premiums are going up because many insurers underpriced plans when they started selling policies in 2013; not enough healthy, younger people signed up; and those who did used more medical care than the insurers had anticipated. As a result, companies like UnitedHealth and Aetna have stopped selling health plans in many parts of the country and the providers that remain have raised prices. Premiums have gone up most in states like Alabama, Arizona, Oklahoma and Tennessee that have three or fewer insurers selling Affordable Care Act plans.
Premiums are rising much more modestly in states where there is more robust competition among insurers. For example, the average cost of the second-lowest “Silver” level plan, the benchmark used by federal officials to analyze the market, will increase by 7 percent in California, 5 percent in New Jersey and 2 percent in Ohio.Premiums are rising much more modestly in states where there is more robust competition among insurers. For example, the average cost of the second-lowest “Silver” level plan, the benchmark used by federal officials to analyze the market, will increase by 7 percent in California, 5 percent in New Jersey and 2 percent in Ohio.
Even with the big premium increases, health experts say that plans on the exchanges generally cost less and provide access to more medical care than the plans that they replaced. All told, the law has helped 20 million people gain coverage, including those who became eligible for Medicaid and young adults allowed to stay on their parents’ policies, pushing the portion of the population without insurance to less than 10 percent for the first time in history. (About 150 million people are insured through employer plans.)Even with the big premium increases, health experts say that plans on the exchanges generally cost less and provide access to more medical care than the plans that they replaced. All told, the law has helped 20 million people gain coverage, including those who became eligible for Medicaid and young adults allowed to stay on their parents’ policies, pushing the portion of the population without insurance to less than 10 percent for the first time in history. (About 150 million people are insured through employer plans.)
With open enrollment starting on Nov. 1and ending on Jan. 31, the federal and state governments ought to make every effort to increase enrollment to spread the insurance risk over a larger population. For instance, of the 27.2 million people who still do not have health insurance, about 5.3 million are eligible for federal tax subsidies and may not realize it, according to a recent report by the Kaiser Family Foundation. People without health insurance will have a tax penalty of about $700 a year in 2017, up from about $400 in 2016. One way to lift enrollment would be to increase the penalty.With open enrollment starting on Nov. 1and ending on Jan. 31, the federal and state governments ought to make every effort to increase enrollment to spread the insurance risk over a larger population. For instance, of the 27.2 million people who still do not have health insurance, about 5.3 million are eligible for federal tax subsidies and may not realize it, according to a recent report by the Kaiser Family Foundation. People without health insurance will have a tax penalty of about $700 a year in 2017, up from about $400 in 2016. One way to lift enrollment would be to increase the penalty.
Congress and the next president could further strengthen the health care law by offering subsidies to middle-income families who currently receive little or no help. Lawmakers should also consider applying to the health care exchanges the kind of reinsurance program Congress has used to encourage insurers to participate in Medicare’s Part D prescription drug benefit program. The Affordable Care Act’s flaws are fixable, but only if politicians from both parties work together in good faith.Congress and the next president could further strengthen the health care law by offering subsidies to middle-income families who currently receive little or no help. Lawmakers should also consider applying to the health care exchanges the kind of reinsurance program Congress has used to encourage insurers to participate in Medicare’s Part D prescription drug benefit program. The Affordable Care Act’s flaws are fixable, but only if politicians from both parties work together in good faith.