Insurers expected to increase ACA premiums sharply this Fall because they did not get their “bail out” funds. Guess who gets the blame?

 

Isn’t it interesting that when predictions come true about the failures of the ACA, the Left and the Media go looking for someone to blame? In this case the failure predicted is collapse of ACA State Exchanges with the projected “premium spikes” for the Fall of 2018 and the blame goes to Congress and the President.

But the blame game continues as Insurers, politicians at every level, and the Media lay the blame for the expected premium increase squarely on the Congress and the President. The “blamer’s” logic is that Congress failed to include any funding for bailing out Insurers in the Tax Reduction and Jobs Act in December 2017.

 The “blamers” also are saying that the GOP  had a chance to lower rates with an amendment that a couple Republicans had hoped to attach to the $1.3 billion  spending package passed on March 23, 2018.

Let’s clarify a couple things:

  • The ACA’s re-insurance “subsidy” program paid participating insurers huge taxpayer subsidies from 2014 until the program was scheduled to expire at the end of 2016.
  • The subsidies were designed help get the ACA Exchanges up and running but not remain intact beyond that point. The intent was to cover two issues:
    • One – the claims of high-cost patients for whom the law’s preexisting-conditions provisions provided guaranteed coverage.
    • The extra subsidies were supposed to keep premiums from skyrocketing. Obviously that failed as premium increased astronomically each year since 2010. By the end of 2016, premiums had doubled from pre-ACA levels.
  • The premium spikes you are hearing about will only affect the individual plans in state exchanges, the so-called Obamacare Plans. The premium increase will impact less than 10 million Americans and 90% of those receive subsidies so they pay almost nothing for their coverage and care. 
  • These points are important to remember because the Media will try to stir up activist who will then cry for single payer.

 You know this Post is no fan of the GOP’s efforts to R&R the ACA over the past 12 months, actually past 7 years. Additionally, we predicted delays and Democrat inspired litigation issues as the GOP continues its piecemeal approach to fixing our healthcare finance and delivery system.

We have already witnessed evidence of this by the lawsuits filed against the President’s efforts for Association Health Plans and allowing Short Term Medical plans to extend to 12 months.

Who does this lack of “bail out” impact the most? The Media would try to make you believe that the folks covered will be harmed but as we stated earlier that is untrue since 90% of the folks covered by these Omabacare plans pay nothing or almost nothing for their premium or services that they receive.

So, who else does this impact? The answer is the states that so enthusiastically embraced the ACA and rushed to create their Exchanges back in 2010 through 2014. They knew that their citizens would get the subsidies offered so they anticipated great enrollment numbers and enrollees would be “hooked” on Obamacare and unable to leave. It’s the so-called “blue” states feeling the biggest impact.

Reports indicate that some states are seeking their own solutions. Ironically, this funding issue may actually cause states to adopt realistic changes and better solutions than the ACA could ever provide. Let’s face it, government bailouts, especially bailouts for government initiated programs, seldom resolve issues and generally lead to more and more funding. Lot’s of examples of that over the pass 50 years.

Some reports indicate that a few states (mostly blue) are looking for how a they could restore the individual mandate (IM). Actually, there are many experts,”real experts”, who believe the elimination of the IM will lead to more reliance on Employer sponsored coverage thus reliving that burden on the states where the citizen lives.
Two things come to mind about that.

  • One – Employer sponsored plans tend to be less costly to members and provide richer benefits than the ACA individual plans.
  • But we wonder- Do “blue” states really want their citizens to leave the state-run and controlled plan for an Employer’s plan? The state would lose control/dominance over that member so you decide the state’s motivation.
  • States are in the news about their plight and their possible steps to fund the Insurers themselves. But will any of them really step up? Or is it just talk?
  • It is realistic to see states take steps to utilize the opportunities President Trump set forward with AHPs and 12 month Short term Med Plans. We’ve already seen efforts by Utah, Iowa, and Wisconsin to initiate steps in that direction.
    Of course, the Dems have threatened litigation.

In an election year it’s easy to predict that these issues will get much press, mostly uninformed or lopsided, but that noting will be resolved. As we’ve witnesses in the discussion concerning the Daca folks and immigration, issues are more important than solutions for certain politicians.
This premium spike issue will work for candidates because most or our citizens will not realize that it affects only the Exchange Individual plans (less than 10 Million people) which is less than 3% of our total population.

The states that ramped up their subsidized Exchange Plans as well  as expanded Medicaid eligibility are in a financial bind. As stated by Mila Kofman, executive director of the D.C. health exchange, “States don’t print money, and individual markets, to become stable, need an infusion of federal dollars,”. Doesn’t the verbalization that “states don’t print money” sound a bit creepy coming from a bureaucrat’s mouth?

In 2010 to 2014, many of us predicted that the ACA subsidy program would become an issue, when it became clear to us that the Federal funding for these programs would cease in 2016. Come on…, we all know that States receiving Federal subsidies is like an addiction! Did anyone expect States to wean themselves off the addiction?

You can see now that while the Media gives time for politicians (including a few in the GOP) to complain and lay blame the crisis was predictable and the solutions are available. But, it’s an off-year election year so getting elected and re-elected is more important than real solutions.

What do you think? In this case we truly are all in this together because the assistance the politicians seek for less than 10 million will adversely impact 330 million of us.
Again, that’s 330 million people impacted so, we really are in this together!

Until next week,

Mark Reynolds, RHU
559-250-2000
mark@reynolds, wtf
It stands for “Walk the Faith”.

 

 

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