Questions that will take years to answer
The Patient Protection and Affordable Care Act is meant to be a complete overhaul of how the United States views and uses health care. The cost of Health Insurance in the United States has continually increased year over year; the number of uninsured or under-insured in America has climbed to 50 Million according to the congressional budget office (CBO). The Patient Protection and Affordable Care Act was written with the goal of addressing many of these concerns.
The method by which the United States chose to go about Health Care Reform has been a huge topic of debate for the last three years… and several years before that. Ultimately the Supreme Court affirmed the decision in June of 2012. This month the Republican Congressmen in the United State congress have gone the way of shutting the United States government down to defund the Affordable Care Act, or delay the individual mandate one of the key components it is dependable on for its success.
There are many valid obamacare concerns and unknowns both sides have brought up, however these concerns have been overshadowed and buried by political rhetoric, or blinded opposition or support of the law. We have compiled a list of unanswered concerns with The Patient Protection and Affordable Care Act.
1) What if Enough People Don’t Sign up for Obamacare?
This week we wrote an article on how many people who may have not been able to sign up for the exchange due to the number of technical glitches present. Since we are only two weeks in, it may not be a big deal, long term what happens if enough of them do not sign up on the exchange?
A little insurance basic, the success of the exchange or any insurance plan is based on the number of healthy individuals that are part of the insurance pool. The risk is then spread across the entire pool of individuals and help levels out premiums. In the case of the Affordable Care Act, younger Americans between the ages of 19-25 will be key to helping keep costs down.
Many conservative groups opposing the Affordable Care Act/Obamacare have been pushing younger Americans to not sign up for insurance through the exchange and just pay the Individual Shared Responsibility fee. If they were successful at doing this these young American citizens would not have any insurance and in return pay the full cost of any medical care they end up needing. In regards to the Exchange; the absence of younger, healthier individuals in the exchange contributing to premiums would result in un-proportionate amount of sick policyholders in the insurance pools, monthly premium costs will increase each year during open enrollment, further discouraging healthy people from buying coverage due to cost. This leaves the sicklier older individuals in the pool. This pattern would eventually lead to a “death spiral,” careening the whole system out of control. This is one of the reasons why the democrats and president Obama refuses to budge on the individual mandate requirement, it is the only system to ensure that either individuals are purchasing insurance or paying a fine equal to a potential monthly premium. Unfortunately this large concern will not be answered for at least another year, when we see future exchange premium prices.
2) What if the Newly Insured Individuals Don’t Understand What They’re Buying?
Individuals who have health insurance understandably see the difficult challenges that are part of every plan, especially during open enrollment. There is no doubt individuals who have never have a health insurance plan will have challenges.
Some basic challenges consumers new to insurance are experiencing: failure to understand how deductibles work, how tiers and plans are different, the difference between the premiums they pay each month and their deductibles. Knowledge is power and with health insurance it may mean the difference between paying a few dollars and thousands of dollars. The problem for the Obama administration is, if these people are paying monthly premiums and due to lack of understanding don’t feel they are getting the most out of their health insurance they may choose not to purchase a plan in the future, and provide negative reviews of their experience. This could make marketing health care plans to the uninsured, or keeping the recently insured on those plans a much more difficult tasks. Currently there is more of a focus on getting people to sign up for plans than educating them, we are not sure if the administration with the help of their navigators will begin providing educational support.
3) What if Someone Lives in State that Did Not Expand Medicaid?
The Supreme Court ruled in 2012 states did not have to expand Medicaid if they did not want to; many of the states with the largest number of uninsured, such as Texas have chosen not to expand Medicaid to millions. According to a recent New York Times report, these states have now left 8 million poor, uninsured Americans ineligible for federal help in getting health care coverage through the Health Insurance Exchanges. We call this the “Obamacare Medicaid hole” These individuals make too little money to qualify for exchange subsidies, but fail to meet their states Medicaid eligibility requirements. Unfortunately, based on the way the law is structured right now there is no support for these individuals through the Affordable Care Act. There are two things that may offer a glimmer of hope. 1) States do not have a time limit to expand Medicaid. If Governors change, or state houses change hands in the upcoming years, a state may change its mind to expand Medicaid. 2) Any one whose state is not expanding Medicaid, and eligible for Medicaid will not be responsible for paying the Individual Shared Responsibility fee if they do not have health insurance. While these individuals will not be responsible for the Individual Shared Responsibility fee, this offers no solace to the 8 million individuals who will not get the necessary health care coverage, shutting out the people who this law was predominantly created to help.
4) What happen to those whose premium increases as a result of the Affordable Care Act /Obamacare?
In the last two weeks we have received over 250 comments with regards to the exchange pricing. There are several individuals whose premium prices have gone up when they compare their exchange prices to what they are currently paying for their private non-employer sponsored health plans. The reality is prices vary across regions, state, and even counties. As a result some individuals will pay higher prices than originally thought. No one really knows what percentage of individuals will be hit with the higher premiums to get coverage on the Health Insurance Marketplace. This is especially true for the individuals that make too much to qualify for a health insurance subsidy.
A major part of the talking point of those who oppose the law centers on these groups of individuals who will be paying more as part of the exchange, but no one really knows how many individuals or families will be impacted. The unanswered questions are; will the number of individuals whose rate goes up speak loud enough to drown out those who are seeing savings on the exchanges? Will they decide not to purchase a plan and pay the fee instead? These are arguably the biggest un
knowns and based on how the numbers add up for many Americans will determine if enough public support is behind it to make politically sustainable.
5) How will success be measure across state lines?
This is another big unknown when it comes to the PPACA, Obamacare. The rollout of the Affordable Care Act varies across state lines. Close to 50% of state are choosing to not expand Medicaid leaving 8 million people uninsured. The number of uninsured individuals that are eligible for Medicaid varies across state lines. Only 17 states have chosen to managed their own exchanges will the remainder have offset the management of their exchange to the federal government. Lastly the number of insurance plans varies by state. New York State has one of the highest numbers of plans available, while Vermont only has a couple of plans. In only 14 days the performance of state managed exchanges have already begun to show some variations versus federally managed marketplaces.
A perfect example of this is two neighboring states, Kentucky and Tennessee. In Kentucky the state is running its own exchange, and within the first two weeks for the exception of a few hiccups things have been off to a great speedy start. One state over in Tennessee where the federal government is managing the exchange the first week has been more of a struggle. Through a combination of glitches with the federal website, and pushback from the local government the state is off to a very rocky start. No one is sure how this will play out in the long run; states that are fundamentally against the law are doing everything in their power to see the exchanges in their states fail. While its still very early to make any conclusive predictions, Its safe to say if initial trends continue or worsen states like Tennessee Georgia and the others fighting against the roll-out will declare the exchanges a failure regardless of their outcome, or will they take cues from the potential success of other states running their own exchanges like Kentucky, DC, etc. and seek a bigger role in making the exchange a success in their own state? No one really knows at this point.