Meanwhile, Back In The Real World

This week Aetna announced that it would be withdrawing from many of the states in which it offers health care plans on the Affordable Care Act exchanges.  Aetna participated in exchanges in 15 states, and it will be withdrawing from 11 of those 15.

mw-de672_aet_20_20150202162433_zhIt’s more bad news for “Obamacare,” which has seen other major insurers back away from offering plans, too.  Aetna says its decision is prompted by substantial losses it is experiencing on the exchanges, all of which arises from the fact that the pools of covered individuals has turned out to be sicker than was originally forecast — and therefore more likely to need expensive care.  If fewer insurers offer plans on the exchanges, there obviously will be less competition, and less choice.  As Aetna’s decision reflects, however, the effect will vary on a state by state basis.

In the meantime, premiums on the exchange plans are going up — and the “individual mandate” penalty for not having health insurance is ratcheting up, too.  In 2017, the average penalty will be $979 per household.  The question is whether the threat of having to pay a $1000 penalty will drive more people to enroll, and whether those currently uninsured people who do enroll will be healthier and therefore help to hold down the costs of the plans for the insurers who offer them, so more even insurers don’t exit the plans.  Ever since the Affordable Care Act was passed, the question has been whether the exchanges can avoid the “death spiral” in which enrollment shrinks, leaving only sick people in the plans, causing ever-greater losses and ever-increasing premiums that simply can’t be sustained.

The Affordable Care Act is unquestionably the signature domestic policy achievement of the Obama Administration.  It’s also another huge government program seeking to force behavioral changes that is anathema to both fiscal conservatives and social libertarians.  In any rational world, a presidential election would be a forum for discussing whether, and if so how well, “Obamacare” has worked — and what alternatives would be.

Of course, we don’t have such discussions about actual policy issues or the real-world performance of important initiatives like the Affordable Care Act in this election.  No, we’re too busy talking about Donald Trump’s latest idiotic foot-in-mouth-episode, or Hillary Clinton’s health issues, or other extraneous topics.  This is the most content-free presidential election in my memory.

We need to remember that the real world is still out there.

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Meanwhile, Back At The Issues . . . .

While our easily distracted nation has been preoccupied with political horse races, insults on debate stages, and brawling at campaign rallies, some of the real issues facing the country plod on.  It’s just that no one is paying any attention to them.

Consider the Affordable Care Act, known colloquially as Obamacare.  It’s been up and operational for several years now.  So, how is it doing?

A man looks over the Affordable Care Act signup page on the HealthCare.gov website in New York in this photo illustrationIt turns out that Obamacare is facing a number of challenges and is in what a recent Washington Post editorial describes as “an awkward place.”  The problem is that although people are still enrolling, they’re not doing so at the rates that were forecast when the new law’s financial viability was evaluated.  If there are fewer enrollments than were estimated, or the mix of new enrollees doesn’t include as many young and healthy people as was originally projected, then the Affordable Care Act could produce substantial premium price increases rather than what the statute’s name promises.

Another aspect of this complicated law is whether it is offering good insurance choices for people.  The Investor’s Business Daily recently published an article that focused on how the Affordable Care Act is working in Mississippi, which is one of the underinsured places that were a focus of the statute in the first place.  The IBD article found that enrollments of uninsured people in Mississippi were disappointing — just 38% of those eligible for subsidies — that the premium costs for the cheapest “bronze” plans are spiking, and that the increased expense may cause some people to opt for paying the uninsured, individual mandate tax rather than buying insurance as they are supposed to do.  Still other articles, from the New York Times and elsewhere, have reported that many people believe that while subsidies might be holding down premium costs in some states, high deductible amounts, which require the insured person to pay cash out of pocket before the insurance kicks in, are making some plans bought on the exchanges unaffordable and unusable.

The Affordable Care Act was a huge new governmental program, hotly debated and the subject of strong opposition from Republicans.  How is it working, really?  We deserve to know, and un any rational world, candidates of both parties would be debating that very important issue.  In this crazy year, however, the news media and the public have been distracted by the Trump phenomenon and all of its embarrassing nuttiness, so even in Republican debates the Affordable Care Act gets short shrift.  And does anyone really believe that, if Donald Trump somehow becomes the Republican nominee, he’ll work to understand the workings of this complex law, and be able to say anything other than that it is a “disaster” and he’ll “repeal and replace it with something much better”?