The Obamacare marketplaces can be thought of as a government-run store. The government gives many customers subsidies, like gift cards, that they can use to buy insurance. But what happens if no companies want to sell their products in the store?
That is the problem that could face Obamacare customers if no insurance carriers show up in a given area, a risk policy makers call the bare-market problem. That risk is growing as the administration sends negative signals about the future of the market. If all the insurers start leaving some stores, consumers there will find their options dwindling, and then their subsidies will become worthless. Most would end up uninsured. The problem could affect as few as dozens of customers — or spread more broadly to affect a substantial fraction of the approximately 11 million people currently enrolled in Obamacare coverage.
The Affordable Care Act’s worst enemies are now in charge of the vast range of health coverage the law created. They’re also discussing changes that could affect a wider net of employment-based policies and Medicare coverage for seniors.
Although Republicans failed last month in their first attempt to repeal and replace the ACA, President Donald Trump vows the effort will continue. And even if Congress does nothing, Trump has suggested he might sit by and “let Obamacare explode.”
Health insurance for the 20 million who benefited from the ACA’s expanded coverage is especially at risk. But they’re not the only ones potentially affected. Here’s how what’s going on in Washington might touch you.
Donald Trump may cast Obamacare as a job killer. But some entrepreneurs say they couldn’t have started their businesses without it.
Obamacare has freed them from depending on employers for health insurance. Instead, they told CNNMoney they can pursue their own American Dreams and work for themselves while getting coverage through the exchanges.
The President-elect’s promise to repeal Obamacare next year has left these small business owners fearful that they will have to dismantle everything they’ve worked for and return to the corporate sector just to remain insured.
Lawmakers draft, then pass laws which can adversely impact business. Rarely do those legislators feel the impacts of their created legislation themselves. Those impacts are usually in the form of financial losses, which can wind up being covered by the U.S. taxpayer, according to a report by Rick Manning in the Net Right Daily of Aug. 13 (online). The account also elaborates on the increasing cost of health insurance, specifically, as being the reason behind those opting to pay the ACA tax or fine – meaning they have opted to go without health insurance coverage altogether.
If the actual number of individuals paying for their health insurance via Obamacare lessens – this will have an adverse effect on the earnings of health insurance companies. Under the Affordable Care Act, these losses will in part be covered by U.S. taxpayers.
Frequent and noted Affordable Care Act critic, Arvik Roy, who is also a Senior Fellow at the Manhattan Institute, has a plan to replace Obamacare – one that does not actually mandate full repeal of the Affordable Care Act.
According to a report in Human Events (online, 8/14) Roy’s proposal would:
● Reform the healthcare exchanges (or marketplaces).
● Call for a repeal of the employer mandate.
● Reform both Medicaid and Medicare.
Other reforms proposed by Roy would address hospital groups employing their collective power to charge high rates; also, medical malpractice litigation reforms are proposed Roy.
The Hill reports Tuesday that though supporters of the plaintiffs in the federal case of Halbig v. Burwell say they only want to ensure Obamacare is adhered to as written, the net effect is that an appeals court decision on Tuesday ruled subsidies for millions of enrollees may be in jeopardy. While that may not be an immediate scenario, speculation now ensues that consumers may at some point have to pay back the subsidies they received from the government; an outcome which could be potentially politically disastrous for the Obama administration.
At the same time, another federal court decision at the 4th Circuit Court of Appeals, reflected a completely different opinion that the IRS can grant such subsidies on the federal healthcare exchanges. The court cited the lack of clarity in the language of the Affordable Care Act. Though, if things eventually go the Halbig way, 5 million individuals could lose their health coverage subsidy.
Nearly 500,000 people in Ohio, Kentucky and Indiana will get refunds or other consideration totaling $19.4 million because their insurers didn’t spend 80 percent of their 2013 premiums on patient care. The requirement, which was designed to curb administrative costs in health care, is one part of the Patient Protection and Affordable Care Act.
The New York Times’ Katie Thomas sheds more detail on the recently released Express Scripts study. Multiple observers question whether the new marketplaces (or healthcare exchanges) will attract an appreciable amount of the sick; a scenario possibly leading to higher premiums, even eventually destroying the new law.
Express Scripts, suggests that early enrollees face far more serious health problems and are older than those covered by employers. The study also shows higher utilization of specialty drugs, often used to treat diseases like cancer and rheumatoid arthritis. The use of such drugs possibly alludes to even more costly medical problems. The article cites Carl E. Schmid, deputy executive director of the AIDS Institute, expressing worries over high out-of-pocket costs connected with a significant number of marketplace plans. The Express Scripts study found that consumers with such plans paid a larger percentage of drug costs in the first two months of 2014, in comparison with those in employer plans.
Overall, early users of the marketplace plans seemed to be filling prescriptions for drugs at rates similar to people with coverage through their employers. Another pharmacy-benefit manager, Prime Therapeutics, said it was seeing slightly higher rates of prescription-drug use among its marketplace customers. Others with their eye on ACA ramifications have cautioned that it’s too early to properly evaluate the health of those who are signing up. The Express Scripts overview looked at a sample of 650,000 consumers receiving coverage in January and February. It did not capture information about those signing up closer to the enrollment deadline. Insurers have said those who enrolled later tended to be younger and were presumably healthier.
A spokeswoman for Regence, a Blue Cross/Blue Shield provider serving the Oregon and Utah areas, told the New York Times the company’s new plans covered a broader array of drugs, also combining medical and drug costs under a single deductible. This allows some customers to meet their limits earlier. She also said that policyholders might be required to contribute toward drug costs if a less expensive medication was available that treated the same condition.
With enrollments higher than expected, and costs lower, some Democrats say it’s time to stop hiding from the president’s health care overhaul, even in this year’s toughest Senate elections.
Republicans practically dare Democrats to embrace “Obamacare,” the GOP’s favorite target in most congressional campaigns. Yet pro-Democratic activists in Alaska are doing just that, and a number of strategists elsewhere hope it will spread.
Not even the Census Bureau will be able to keep track of the full impact of Obamacare, critics warn. The Census Bureau is significantly changing its survey questions on health care, which some fear will make it difficult to give an accurate reading of how many people have gained insurance under the law.
Republicans are now accusing the administration of overhauling the survey in order to obscure the effects of the Affordable Care Act.