As ACA faces new challenges, fixes not assured

This is a picture of Access Health's New Britain store

Arielle Levin Becker / The CT Mirror

Access Health’s New Britain store

Washington – The Affordable Care Act is facing more challenges than at any time since its glitch-riddled initial enrollment period in 2013, and political prospects for returning it to better health are cloudy.

Open enrollment will begin on Nov. 1, but many of those signing up will face higher premiums and fewer choices of plans and insurers. Those problems have re-energized GOP opposition to the ACA, creating a politically fraught climate in which to address the health care law’s challenges.

In Connecticut, premium rate hikes for people buying insurance on the ACA’s exchange, Access Health CT, will rise nearly 25 percent on average.

The Kaiser Family Foundation determined that a 40-year-old  living in Hartford who purchased a moderately priced “silver” plan would experience a 27 percent premium increase, from $318 to $404.

The Department of Health and Human Services said that nationally premiums would rise 25 percent on average in 2017, reflecting higher medical costs for insuring members. But those increases vary widely across the nation, and so do the health of the exchanges.

In Arizona, Illinois, Montana, Oklahoma, Pennsylvania and Tennessee, approved rate increases topped 50 percent. Meanwhile, Indiana is experiencing a slight decrease in premium costs, and Virginia remains stable.

“In those states, [the ACA] looks like its functioning fabulously,” said Gary Claxton, vice president of the Kaiser Family Foundation.

The Department of Health and Human Services says many consumers won’t feel the increase in premiums because about 80 percent will be subsidized by the federal government. Low- and moderate-income families and individuals are eligible for the subsidies, in the form of tax credits that can be used to reduce monthly premium costs. But remaining exchange customers are on their own.

“Even if there isn’t an impact on the people who are subsidized, there is an impact on those who aren’t,” Claxton said. “You have to have a (working) market for those who are paying the premiums.”

Democratic White House hopeful Hillary Clinton said she will consider extending subsidies to higher-earning people. “Costs have gone up too much,” Clinton said in a radio interview in Florida this week.

Besides higher premiums, consumers are facing fewer choices.

Connecticut’s exchange is among the many that have lost insurers for this enrollment period. United Healthcare announced in April it would no longer participate in Access Health – part of a strategic withdrawal from all state exchanges. Another insurer, a co-op called HealthyCT, was deemed financially unstable by the state and won’t offer plans.

That means consumers have only two insurers to pick from, Anthem Blue Cross and Blue Shield and ConnectiCare Benefits. ConnectiCare almost dropped out too because the Connecticut Insurance Department would not approve an additional premium increase the company wanted.

Nationally, fewer insurers will participate in exchanges in 2017 than in any year since the ACA exchanges were inaugurated. Yet the Obama administration is predicting an increase in enrollments for next year, something that is not assured.

‘Premium spiral’ driving prices up

On Thursday, during an earnings conference call with analysts and investors, Aetna said it expects to lose $350 million on its individual commercial market business, most of that loss from policies sold on the exchanges.

Because of the losses, Aetna said in August it would cut its participation in the exchanges from the current 15 states – which do not include Connecticut – to only four.

Aetna said the problem with the exchanges was the “excess morbidity”of its customers in that market; that is, they tended to be sicker and older than expected, but not yet eligible for Medicare.

Aetna CEO Mark Bertolini said earlier this week young, healthy people were not signing up for policies on the ACA exchanges in needed numbers, even though coverage is mandated by law and noncompliance can bring a tax penalty.

On the earnings call, Bertolini said the federal government had to help the “risk corridor,” program, which takes money from plans with unusually high profits and gives it to plans whose premiums “fall short” of a certain amount. The ACA called for the federal government to subsidize the program for the first three years, but Republicans in Congress defunded the subsidy starting in 2015.

“Until that mechanism changes, or until the pool substantively changes, we’re going to find ourselves in a premium spiral that’s going to continue to drive rates up,” Bertolini said. Even if legislative fixes were made by the next Congress, he said, the soonest Aetna could re-enter the exchanges was 2019 and most probably 2020 because of the time needed to get new rates approved.

Insurers also want a permanent repeal of an ACA tax on policies that helps fund the law, and greater scrutiny of those allowed to purchase insurance in the exchanges outside the normal November through December enrollment period.

Under the ACA, loss of a job and some other life events allow people a special enrollment period. But insurers say that allows the uninsured who get sick and need expensive treatment and medications to “game” the system, since the ACA prohibits insurers from denying coverage to those with pre-existing health conditions.

That may be possible to fix without an act of Congress if Clinton wins the presidency. Other fixes that require congressional action will depend in large part on the results of the election.

Republican presidential nominee Donald Trump has vowed to swiftly repeal the law, which Republicans in Congress already have tried to do more than 60 times, in whole or in part, under President Obama. But Obama says Congress may be cooperative when he is out of office. A Democratic takeover of the Senate could help.

Claxton is guardedly optimistic Republicans may agree to certain fixes “with the recognition that there’s a new president and the ACA is beneficial to people.”

“There are some things that probably could happen,” he said.

Some of the ACA’s provisions are also very popular, including allowing adult children to stay on their parents’ policies until they are 26 years old and the ban on excluding people with pre-existing conditions. There’s also the fact that under the ACA, the number of uninsured has dropped dramatically.

The GOP wants to keep provisions that people like in its replacement of the ACA, but doesn’t have a comprehensive plan.

“At some point the Republicans can’t be opposed to everything,” Claxton said.

He said the issue of risk corridors is “something that could be worked out with discretion” and increasing subsidies could be considered in a comprehensive tax bill.

“Spending money on a program that has issues is not fun, but presiding over a program that faces a crisis is a lot less fun,” he said.

Sen. Chris Murphy, D-Conn., a main champion of the ACA, said it “has allowed 20 million more Americans to find insurance, prevented 129 million people with pre-existing conditions from being denied coverage, and saved 10 million seniors almost $2,000 a year on prescription drugs.”

“But our health care system is still far from perfect,” Murphy said. “I hope that next Congress, Republicans stop trying to repeal the law and that both parties can come together to rein in costs, stabilize the exchanges and expand coverage even more.”

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