The Affordable Care Act is about to become a lot less affordable.
A large number of insurance companies that issued individual policies under the ACA are seeking premium increases for 2016 ranging from 10 to 30 percent. The proposed rates have been submitted to the federal Department of Health and Human Services. They might as well as be submitted to It’s a Small World at Disneyland since the HHS has no authority to force insurers to pare back rates or rate increases.
Why are rates going up? It’s simple. It’s because costs are going up partly because more people are accessing healthcare. And we’re not talking about routine doctors’ visits that usually aren’t fully covered until one reaches a $1,000, $1,500 or $2,000 deductible.
Insurance companies aren’t worried if they lose enrollment since they want to remain profitable.
At the end of the day, insurance is a business.
But increasing rates instead of simply weeding out the individuals that cost the most will impact an entire class of people.
It will make more and more people leery of buying insurance coverage. They will end up dropping it and paying a fine instead just like many in their 20s who couldn’t be convinced it is in their best interest financially to buy coverage given the odds they’d need to access it was a long shot at best. Several in Manteca in their 20s have indicated they are planning not to renew coverage since discovering they are still shelling out money for doctor visits and — in some cases — the payment of insurance premiums is prompting them not to go to the doctors due to limited personal budgets because they no longer have the money.
So the ACA when all is said and done will create a new class of people: Americans who bought insurance but were forced to drop it due to double digit rate increases that are then slapped with government fines for not having insurance.
In other words, the biggest benefactor from the inevitable higher rates will be the federal government.
No big deal, right? There has to be collateral damage.
That, however, isn’t how ACA was sold to the masses.
Instead of being called the Affordable Care Act it should have been called the You’re Paying for It Care Act.
“Affordable” is — and always was — a misnomer. The goal was to get more people covered with insurance but the benefit wasn’t necessarily for the individuals but healthcare providers.
Under the previous model, hospitals — as an example — couldn’t turn down someone in the emergency room that needed care regardless of their ability to pay. Now they are assured that most people are covered to some degree. So instead of losing 100 percent, their losses on providing care are reduced drastically. In a way that is a good thing since not only was the way of doing things unsustainable, it also collapsed the cost of providing such care into charges made to paying customers and to those covered by private insurance.
The bottom line is obvious: Northing is free.
In order to reduce the risk and assure that insurance firms are able to keep functioning they must be able to charge rates that reflect their exposure.
The ACA in one sense has accomplished the goal of making more people pay for their healthcare. But at the same time the disincentive — the fines built into the ACA for not having coverage if you can afford it based on what the government thinks you can afford — obviously isn’t getting everyone to comply with the federal edict.
The goal should have been improved healthcare instead of trying to make it universally affordable.
If a government wellness system designed to prevent people from developing a repertoire of ills was in place it would go a long way to reducing costs. Having the government pay for the education of nurses and doctors in exchange for five to seven years of service in wellness clinics to cover their education while being paid a modest salary would go a long way toward reducing catastrophic care needs that drive health care costs.
A little tough love would help too. Someone who has fallen three times through efforts to get them off drugs and such should no longer have access to catastrophic care for maladies that can be traced back to drug use even if through a private plan where others that pay for insurance are forced to pick up the cost.
You want to play by your own rules and deliberately endanger your health doing illegal drugs and do so not once but three times after being caught you’re on your own.
All the ACA ultimately will do is to rearrange the deck chairs on the proverbial Titanic.
Nothing has been done to make health care more nimble and responsive when it comes to dealing with those that are responsible for incurring much of the costs.
This column is the opinion of Dennis Wyatt and does not necessarily represent the opinion of The Journal or Morris Newspaper Corp. of CA. He can be contacted at firstname.lastname@example.org or 209.249.3519.