It's time for consumers to start objecting to efforts to "stabilize" insurance companies with federal dollars because it doesn't work. Not it won't work, but based on Obamacare, it DOESN'T work.
Insurance companies have a single goal: Take in as much as they can in premiums and pay out as little as possible. EVERYTHING else is compromise in their view and politics.
This adversarial relationship between consumers and health insurance companies illustrates the problem with Obamacare's government-insurance company partnership. You, the federal government cannot protect and defend your partner insurance companies unless you also act as an adversary against the people who put you in office and whom you're supposed to represent (consumers).
In assessing stabilization, it's impossible to include the suppositions and nonsensical headlines today about Trump's year-old presidency. Obamacare is unchanged and Obamacare's "stabilization" plans failed and here, the Obama Administration's work is what must be examined in considering "stabilization."
Specifically, I'll refer to the Obama Administration's Department of Health and Human Services October, 24, 2016, "Health Plan Choice and Premiums in the 2017 Health Insurance Marketplace," https://aspe.hhs.gov/system/files/pdf/212721/2017MarketplaceLandscapeBrief.pdf.
In the Obamacare partnership, the government did not put the brakes on how much their partner insurance companies could charge except as a percentage of income for self-only health insurance, which left millions of families finding that insurance companies shifted additional premium charges to family members, making dependent coverage unaffordable for millions of families caught in the family glitch.
And, in fact premium rates for everyone have gone up every year since Obamacare (I'll address the silly argument of not as much as they might have later). There are many cites of how much employer sponsored insurance, individual insurance market and Obamacare exchange policies have gone up, all in the double digits since Obamacare.
Overall rates are up although insurance companies vary in how much each year they raise rates, so oftentimes Obamacare fans will choose a year where the INCREASE WAS LOWER, but note, it was still an increase and overall rates have gone up in double digits since Obamacare's beginning in 2010.
The Not as UP as they would have been argument is ridiculous. First, because the crystal ball power is always a "Maybe" power. Second, because if you look at how the government justifies stating lower increases in premiums, it's based on people purchasing WORSE coverage or government entitlement money in the form of cost sharing and premium assistance used to DISGUISE how much more an equivalent policy from one year to the next will cost.
Occasionally, even HHS acknowledges this, as in their OCTOBER 2016 report:
In their Table 2, HHS informs that the 2017 INCREASE for healthcare.gov plans, Obamacare, is 25 percent. BUT, in an effort to disguise this failure of Obamacare, the report emphasizes that "if ALL people shopped and selected the LOWEST COST PLAN in a metal level, they would see savings in premiums." Got that? Consumers COULD lower their costs up to 20 percent by simply buying WORSE insurance. This isn't a policy change, this is the insurance company way--provide less in order for people to reduce their insurance costs.
This is confirmed by Factcheck.org that also boasts that worse insurance can save consumers money as they talk about the increase of up to 29 percent of consumers going into HSAs, the high-deductible health savings account plans. "The Kaiser Family Foundation said the average premium increase in 2016 and 2015 was half a percentage point lower because of this shift to lower-cost but higher-deductible health plans." (Factcheck.org). Got that? THE INCREASE was lower because of a shift into high-deductible plans, worse coverage.
Obamacare Efforts to DISGUISE increases rather than prevent them is accomplished with government payoffs to Obamacare enrollees in the form of premium tax credits and cost sharing and to insurance companies in the form of reinsurance and risk corridor payments:
In its October 2016 report, HHS congratulates that for Obamacare participants, the government's entitlement payments will effectively disguise these enormous premium increases (except in terms of public spending and our tax money used to finance it), "Most Marketplace enrollees will receive financial assistance to help with the cost of their monthly premiums." That's not a reduction in what insurance companies charge, that's saying, "Don't worry about it, we'll pay our partner insurance companies so that you won't see the increases to a large extent."
The federal government also paid the payoffs to insurance companies so that they'd be willing to participate in Obamacare, through the TRANSITIONAL program of reinsurance and risk corridor payments, which expired UNDER OBAMACARE in 2017. This is what the government means now when it talks about "stabilizing," with plans to resurrect a federal government payoff plan to insurers that goes beyond even what Obamacare promised, which was the payoff program that expired for the 2017 benefits year.
Now, how stupid do we have to be? We know that insurance companies left exchanges in droves this past year because the payoffs stopped, so we're not talking about stabilization, we're talking about ongoing payments to insurance companies and then having to renew those payments in order to keep insurance companies from punishing us with even higher rates.
Insurance company justifications for RAISING PREMIUMS, like PREMIUM INCREASES THEMSELVES, will never stop under the Obamacare government partnership program.
Try to think of all the reasons you've heard so far for the outrageous prices we pay to health insurance companies. Here's some.
There aren't enough young-healthies enrolled. EVEN WITH Obamacare's forced purchase there aren't enough young people enrolled. This can mean a couple of things, that the young-healthies can't afford health insurance on their own and therefore "fall through the cracks," of forced insurance purchase under Obamacare," that the young-healthies are paying the tax fine penalty instead of spending their money on health insurance or, and this has already been documented, they are choosing the cheapest coverage they can get. Which not only frustrates insurance companies hoping to even out people who will use insurance with people less likely to in their more expensive plans, but flies in the face of the "single risk pool" myth publicized by President Obama.
Rising medical costs. Well, we all know that, and still there have been no limits on what we can be charged for medical services even as our country lags in life expectancy and medical error deaths are the third leading cause of death in the US. Logically, insurance companies would use their power and clout to NEGOTIATE better rates, but Obamacare made it easy for them to avoid this work by paying them off to protect them from losses and by allowing for narrow networks, fewer provider choices, both damaging to taxpaying consumers.
Having to cover those preventive services required by Obamacare. I don't like these provisions, but not because they cost insurers money to cover, but rather because we pay so much more to get coverage of what are really noninsurance expenses, NON-contingency costs but finite costs and we should not have to pay a premium for them. Insurance is for covering unforeseen and undefined costs associated with needed medical services, RISK not finite once a year checkup costs.
Nevertheless, even this low-hanging fruit basic costs of preventive services are used by insurers to justify premium increases AND are used again by insurers to justify INCREASES in out of pocket costs of deductibles, copays and coinsurance for needed medical services.
More of those "SICKER" people are choosing more expensive plans rather than an even mixture of young-healthies and "SICKER" folks, which is not about illness but is about having to pay out for services for illness.
Well, Obama's Administration did a lot for insurers here, too. First, they can charge more in premiums for tobacco users and the old (so much for single risk pool nonsense), second, they can charge more to treat illness through higher deductibles, copays and coinsurance, third, CMS enacted an end of life counseling provision so that those on Medicare can be advised and doctors can be paid to give their opinions about whether a certain treatment is "worth it," including the cost of it. Then, insurers can make us jump through more hoops with preauthorization requirements for more services. If you notice, people are also discouraged from using insurance for follow-up visits to their providers who now routinely charge again for such follow-up visits.
But still it's not enough for insurers who want those young healthies in the more expensive plans. So their partner, the Obama government did MORE. In 2015, CMS prohibited the use of temporary health insurance policies which would no longer satisfy the individual mandate in order to "capture" more of those young healthies and try to force them into buying more expensive health insurance plans. In 2015, the Obama Administration also allowed insurance companies on exchanges to raise their rates more for bronze plans than they raised them for silver plans (though they raised rates for both) in order to make the more expensive plans look like a better deal.
Insurers are still not happy.
In anticipation of the ongoing complaints by Obamacare insurance companies, Hillary Clinton even proposed enlarging the pool of customers for insurance companies, which is already forced for every working American just about, and said she'd make it legal for illegal immigrants to participate in Obamacare. This would not have worked either, because insurance companies are NEVER satisfied until they achieve their goal, take in money and pay out nothing.
Insurers will not be satisfied and that's why "stabilization" is an idiotic and at BEST a very expensive temporary band-aid that should not be part of the price we pay as taxpayers in order to keep insurers from price gouging us.
