Unlike recent campaign
cycles, when Republicans capitalized on Obamacare sticker shock, they’re now
likely to be the ones feeling the wrath of voters.
By PAUL DEMKO
06/24/2018 06:59 AM
EDT
Obamacare premiums
are once again poised to spike by double digits in 2019, causing heartburn for
politicians as voters will head to the polls within days of learning about the
looming hit to their pocketbooks.
But unlike recent
campaign cycles, when Republicans capitalized on Obamacare sticker shock to
help propel them to control of Congress and the White House, they’re now likely
to be the ones feeling the wrath of voters.
That’s because
Republicans are now in total control of the federal government and therefore on
the hook for the health care system’s chronic shortcomings. Polling data has
consistently suggested that more voters will blame Republicans for future
problems with Obamacare. In addition, the GOP’s repeated failures to repeal
Obamacare after eight years of campaign promises will make it difficult to
galvanize the base on health care.
Democrats and their
allies have been hammering President Donald Trump and congressional Republicans
for “sabotaging” the health care markets and driving up premiums. Protect Our
Care has been running digital ads in 13 states featuring news coverage of big
rate hikes and concluding with a sound bite from Trump: “Let Obamacare
implode.”
They hope that
message will stick with voters come November.
“The political
implications go only as far as people understand that they are a direct
consequence of the administration’s actions,” said Rep. Raul Ruiz (D-Calif.), a
medical doctor who sits on a key committee that oversees health
care. “If they realize that, then they will be very, very upset with them.”
In particular,
Democrats blame Republicans for eliminating the mandate penalty for failing to
obtain health insurance, which was designed to be a cudgel to compel people who
might otherwise go uninsured to buy coverage. They also point to the Trump
administration’s efforts to make it easier to buy skinnier, cheaper plans that
don’t meet the Affordable Care Act’s coverage requirements and patient
protections as an exacerbating factor.
“Once they fractured
the mandate, that changed the insurance pool,” said Rep. Richard Neal
(D-Mass.), ranking member on the Ways and Means Committee. “Insurance is based
upon shared risk, meaning fewer people contributing, the premiums escalate.”
Republicans scoff at
the notion that they’re to blame for Obamacare’s failings. They point out that
big rate hikes were a chronic condition of the exchange markets long before
they took full control of the government.
“The Affordable Care
Act has been a total failure,” said Rep. Buddy Carter (R-Ga.), a pharmacist who
serves on one of the key House committees dealing with health care. “It’s been
a train wreck since Day One. What we’re trying to do is to fix it.”
Republicans further
argue that Democrats sabotaged a bipartisan effort to pass legislation designed
to stabilize the markets and reduce rate hikes. They contend that Democratic
concerns over abortion language that ultimately derailed the deal were a
smokescreen.
“They are the reason
why we didn’t pass the legislation that would have solved the issue,” said Sen.
Bill Cassidy (R-La.), who has been closely involved in efforts to come up with
a Republican plan to replace the ACA. “I can only guess that it’s politics.”
Democrats counter
that the GOP added the abortion restrictions knowing that would be the
deal-breaker.
Insurance experts
generally agree that the rate hikes will be more severe because of actions
taken by the Republican-led Congress and the Trump administration.
“If it hadn’t been
for the individual mandate being repealed, and the threat of short-term and
other loosely regulated plans proliferating, I think we would have seen
single-digit premiums increases,” said Cynthia Cox, an insurance expert at the
Kaiser Family Foundation. “Insurers are performing much better on the exchange
markets than they had in the early years.”
However, that strong
financial performance of the markets is also complicating Democratic talking
points about sabotage. In many states, competition is increasing as insurers see
opportunities to move into markets with little competition. Most notably, Oscar
Health — the tech-friendly startup that’s lost hundreds of millions in the
Obamacare markets — is entering or expanding its footprint in six states.
That’s a stark
contrast from last summer, when dozens of counties across the country were at
risk of having no competing insurers due to market exits.
But double-digit
premium increases are still likely in many states, as evidenced by the rate
filings that have been trickling out in recent weeks. Premiums for the most
popular Obamacare plans are going up by 15 percent on average — about $100 per
month — according to an analysis of rate filings in 10 states by Avalere
Health. While rates won’t be finalized until the fall, it’s already clear that
there will be wide discrepancies across the country that could affect the
political salience of the issue.
Insurers in Maryland
want to raise rates on the most popular plans by an eye-popping 53 percent,
while New York insurers are seeking average premium increases of 24 percent. By
contrast, insurers in Pennsylvania want to raise premiums by only 5 percent on
average. All four insurers selling Obamacare plans in Minnesota want to
decrease premiums.
One big factor
affecting the severity of the rate hikes is how insurers account for the
removal of the individual mandate. The Congressional Budget Office has
projected it will increase premiums by 10 percent, mainly because fewer healthy
people will opt to enroll, but Republicans have scoffed at that as an
unrealistic assessment of the mandate’s significance.
“It’s really kind of
a crapshoot for the actuaries to say, well, it is or it isn’t going to have an
effect,” said John Baackes, CEO of L.A. Care Health Plan, which has 70,000
Obamacare customers. “We will make a decision with our gut.”
Highmark Health,
which sells Obamacare plans in Pennsylvania, West Virginia and Delaware, plans
to raise premiums by 5 percent next year to account for the repeal of the
mandate. The insurer made money on its Obamacare customers last year after
piling up big losses on that book of business in prior years.
“The rates are
catching up to the risks,” said David Holmberg, Highmark Health’s CEO. “Every
time you change the rules you disrupt that.”
The other major wild
card is the Trump administration’s efforts to increase the availability of
cheaper plans that don’t meet the ACA’s coverage requirements. On Tuesday, the
Labor Department finalized rules making it easier for small businesses and
self-employed workers to band together to purchase association health plans.
Still in the pipeline are regulations that will expand the availability of short-term
plans.
What it all comes
down to for insurers is trying to gauge how many people will drop coverage
entirely or seek options outside of the Obamacare markets due to the changes,
said Jim Whisler, who leads Deloitte Consulting’s health actuarial practice.
“That’s the real wild
card,” Whisler said. “It really dramatically increases the range of reasonable
assumptions.”
Republicans are
unimpressed by assertions that insurers will be forced to raise rates because
of changes they’ve made to Obamacare.
“Insurers are going
to cite anything as factors to increase their premiums,” said Carter. “I can
assure you that this is a direct result of the Affordable Care Act.”
Democrats note that
Republicans are hoping to at least partially insulate themselves from health
care attacks by passing a barrage of bills designed to address the opioid
crisis. But Ruiz points out that many individuals who enter rehab to treat
opioid addiction are enrolled in Medicaid, which Republicans sought to
dramatically scale back as part of their Obamacare repeal efforts.
“You realize that
this is a small step forward, but 10 steps back if they get their way,” Ruiz
said.
https://www.politico.com/story/2018/06/24/obamacare-rate-increase-republicans-election-642386?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202018-06-25%20Healthcare%20Dive%20%5Bissue:15913%5D&utm_term=Healthcare%20Dive
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