When the health insurance startup Oscar lost $92 million selling policies on New York’s insurance exchange last year, CEO Mario Schlosser could have joined the insurance executives blaming Obamacare for their companies’ struggles. Instead, he changed his business model.
Out went Oscar’s original New York model of selling traditional insurance — with access to nearly every doctor and hospital in town — to individual customers via the Affordable Care Act’s online marketplace. In came “narrow networks” that offer customers less choice but lower prices. Schlosser believes the new approach will make the company’s offerings more attractive to customers — and more profitable for investors.
Recent weeks have brought a storm of questions about whether the health insurance exchange system at the heart of President Obama’s signature health law is already unraveling amid defections by major insurers. But as Oscar’s decision illustrates, the true picture is more nuanced.
The government is offering some ideas to try to fix the Affordable Care Act, the healthcare law known as Obamacare, amid a series of missteps that have befallen President Barack Obama’s signature legislative achievement.
With Obamacare having being dogged by negative news over the past few weeks — as major insurers have pulled out of some public exchanges and regulators have said the exchanges are “near collapse” — the US Centers for Medicare and Medicaid Services, or CMS, proposed a series of changes on Monday to try to correct some of the exchange issues.
It has been a hard couple of weeks for Obamacare. The law’s online marketplaces — where people were supposed to be able to easily shop for health insurance — have been suffering from high-profile defections and double-digit premium increases.
Critics of Obamacare have pointed to the recent problems as proof the market is not working, while even the law’s staunchest defenders are arguing that the marketplaces need some fixes. Here are four key challenges to the program and a survey of some possible solutions.
As insurers push large premium increases for 2017 Obamacare plans, some of the steepest hikes have been requested by insurers in crucial swing states that could determine control of the Senate.
In nine of 11 states with competitive Senate races, at least one insurer seeks to hike rates for Obamacare customers by at least 30 percent next year: Highmark Blue Cross Blue Shield in Pennsylvania wants to jack up average premiums by more than 40 percent. In Wisconsin, three insurers have asked for rate hikes of more than 30 percent. In New Hampshire, two of the five carriers want to sell plans with rate increase above 30 percent.
The potential sticker shock — coupled with the likelihood many consumers will have fewer choices next year after major insurers scale back their exchange participation — creates a potential political opening for Republican candidates, especially since the next Obamacare enrollment season starts one week before Election Day.
Mylan, the maker of the EpiPen, is embroiled in a controversy over the pricing of the allergy-treatment medicine.
The company has increased the price of the drug over 500% since 2007, from a list price of $93.88 to $608.81 today.
In a press release defending its business practices, the company also laid part of the blame at the feet President Barack Obama and the Affordable Care Act, the healthcare law better known as Obamacare.
It’s going to be a lot easier for people to pick an Obamacare plan in 2017, if only because there will be fewer to choose from.
One of the biggest drivers of increased healthcare costs is the lack of competition in some markets. This problem is acutely present for the Affordable Care Act’s public insurance exchanges, according to a new study by Avalere Health.
According to the healthcare consulting firm, the high-profile exits of large insurers such as Aetna, United Healthcare, and Humana have eliminated a significant amount of competition within the exchange market.
Industry giants Aetna (AET), UnitedHealthcare (UNH) and Humana (HUM) are scaling back their presences on the exchanges. And smaller insurers, including more than a dozen co-ops funded by the federal government to foster competition, have gone out of business or are dropping out of the program.
Nearly 36% of markets may have only one insurer participating on the exchanges, up from 4% this year, according to an analysis by Avalere Health, a consulting company. And nearly 55% may have two or fewer choices, up from 33% in 2016.
Tennessee’s insurance regulator approved hefty rate increases for the three carriers on the Obamacare exchange in an attempt to stabilize the already-limited number of insurers in the state.
The rate approvals, while a tough decision, were necessary to ensure that consumers around the state had options when open enrollment begins in November, said Julie Mix McPeak, commissioner of the Tennessee Department of Commerce and Insurance. BlueCross BlueShield of Tennessee is the only insurer to sell statewide and there was the possibility that Cigna and Humana would reduce their footprints or leave the market altogether.
So much for choice. In many parts of the country, Obamacare customers will be down to one insurer when they go to sign up for coverage next year on the public exchanges.
A central tenet of the federal health law was to offer a range of affordable health plans through competition among private insurers. But a wave of insurer failures and the recent decision by several of the largest companies, including Aetna, to exit markets are leaving large portions of the country with functional monopolies for next year.
Aetna’s sudden decision to quit most of its Obamacare insurance markets was the latest mess in the health law’s rockiest stretch in almost three years. It’s Kevin Counihan’s job to clean it up.
Counihan, CEO of the federal insurance marketplace, told POLITICO’s “Pulse Check” podcast that Aetna’s flip-flop — the company announced Monday it will exit from 69 percent of counties it now serves through Obamacare, just three months after committing to stay and even expand — doesn’t alter the administration’s strategy.