Ever since the Senate healthcare bill was defeated in late July, lawmakers have turned their focus to stabilization of the marketplaces—those state-based shopping malls for health insurance plans. Reduced health plan choices and premium increases are the two main causes for concern.
At least 45 U.S. counties were potentially looking at zero plan offerings for 2018, after a number of large carriers said they were discontinuing certain marketplace plans for financial reasons. Many stakeholders pointed to the abandonment as evidence that the Affordable Care Act (ACA) is failing.
However, as of Thursday, all 45 of the previously bare counties now have other established insurance companies entering the areas for 2018. The last bare spot was Paulding County in Ohio, which now will be covered by not-for-profit CareSource.
Awesome. That problem solved itself through traditional market forces and cooperation between states and insurance companies.
But there’s the additional problem of increasing premiums. When you hear estimates that some “Obamacare” premiums are going up by 18% next year, it sounds like more evidence that the policy is failing, but let’s put this into greater context.
When you take a high-level view of the dominant health insurance sources, you see that:
- 155 million Americans are covered by their employer health plans;
- 76 million are covered by Medicaid;
- 55 million are covered by Medicare; and
- 12 million are covered in marketplace plans.
When anyone speaks of “Obamacare” premium increases, they’re talking about the 12 million enrollees in the marketplaces—not all of America. And it’s most likely they’re not counting in the federal subsidies that help some consumers pay their marketplace premiums. Not everyone qualifies for financial help, but for 2016 plans, 10 million individuals received the advanced premium tax credit.
What all this means
Here’s what we need to keep in mind:
- Only a small percentage of Americans are in the “Obamacare” marketplaces.
- Every county does in fact have at least one marketplace insurance offering—not unlike employer-provided insurance where workers usually have only one insurer to choose from, too.
- In many areas, marketplace premiums will increase—not unlike premiums in every other insurance category.
- In the marketplaces, consumers aren’t going to foot the entire bill for the premium increase.
The point here is that as lawmakers seek to stabilize the marketplaces, the political rhetoric should be viewed in context.