Still Waiting for the 'Affordable' in the Affordable Care Act
Health care dominated the news cycle in 2017. Yet, for all the legislative wrangling and rhetoric, little changed this past year.
It is my job to listen to health-care consumers. They entered 2017 worried about the cost of coverage. They find themselves at the start of this year in the same place they ended the last. People want to know: What happened to the “affordable” part of the Affordable Care Act?
Today, more than four in 10 health-insurance shoppers don’t qualify for government subsidies that would shield them from cost increases. These are generally not wealthy people. They’re people like John Connley, a 45-year-old general contractor from Arkansas who saw his monthly premiums rise from $181 to more than $700 in three years. He had to drop his plan, and he’s lost all confidence in the system. “Prices are going up … certainly not down,” he recently told me.
John is among a sea of consumers who face a growing challenge to pay for the cost of their prescription drugs, or who are forced to choose between paying for health insurance or their mortgage. These people want help and they need options.
The situation is especially grave for families who buy insurance on their own. Our data show that the average unsubsidized family will pay $1,168 per month for coverage in 2018 — $410 higher than the average American mortgage. This is a 17 percent increase over last year!
How many families do you know that can pay $14,000 per year for health insurance? Not many, I’m willing to bet. And this $14,000 price tag doesn’t include the cost of things like prescription drugs — list prices for some insulin products nearly tripled in the past decade — or annual family deductibles, which can add another $10,000 per year.
Is it any wonder that people put off seeing the doctor and getting their health needs attended to when faced with costs like these? According to Gallup, nearly three in 10 Americans delay medical treatment due to cost concerns. And that figure that hasn’t significantly changed since before the implementation of the Affordable Care Act.
Until this cost crisis is addressed through legislative or regulatory action, there’s little hope in sight. And that’s a shame, because for American consumers, health coverage is peace of mind.
You see the value that people place on health insurance reflected in the strong enrollment figures in 2017, despite the fact that the latest open enrollment period was half the length of previous years. You see it, too, in the way people respond when asked whether they might behave differently if there were no tax penalty for going uninsured. In a recent eHealth survey, 77 percent of unsubsidized enrollees — that is, those bearing the heaviest cost burdens — said they would buy coverage anyway.
With all this in mind, there are a number of things those of us in the health-insurance industry — and who want to deliver greater choice and affordability to consumers — must watch in 2018.
First, the impacts of rolling back the Obamacare tax penalty for people who go without qualifying coverage will be ongoing. The survey results cited above suggest it may not send health-insurance shoppers running for the exit, but it’s unlikely to help reduce the cost of coverage.
Second, discussions of how President Trump’s forthcoming order on short-term plans will affect the individual insurance market are likely to kick into high gear. The duration of these policies, which fail to meet the requirements of the Affordable Care Act, was restricted to a 90-day maximum in 2017. It’s widely expected that this restriction will be rolled back in 2018.
Historically, short-term plans were primarily bought by people waiting for coverage to begin under an employer-based policy. But these plans surged in popularity with the 2014 implementation of the Affordable Care Act. Though not intended to provide comprehensive or long-term coverage, the availability of short-term plans for periods beyond 90-days may prove tempting to price-sensitive consumers who don’t qualify for government subsidies and can’t afford to buy more comprehensive coverage.
Finally, all eyes will be on Congress and regulatory agencies for meaningful actions to help stabilize the shaky individual and family health-insurance market. The stalled Alexander-Murray and Collins-Nelson proposals of 2017 might have provided a measure of stability. Similar efforts should be revived and taken up in 2018.
Consumers are looking for coverage, choice, and reasonable costs. Most of all, they want peace of mind. Decisive action is needed to stabilize the market and provide broader access to subsidies with new tax benefits for those who are paying premiums on their own in the individual market. A first step toward delivering on Obamacare’s promise of “affordable” coverage would be to loosen the benefit guidelines and introduce affordable coverage alternatives.
Scott Flanders is CEO of eHealth, Inc.