The ACA market is really two markets in a state: the subsidized market which has seen great deals due to Silver Loading and the non-subsidized market which saw several years of junk kicking rate increases.
The exchanges saw a 40% drop in unsubsidized enrollment between 2016 and 2018, and the declines hit almost every state. #healthcare https://t.co/5kWkObMPL5 pic.twitter.com/eA4KJJhWD2
— Modern Healthcare (@modrnhealthcr) August 14, 2019
The unsubsidized market has shrunk dramatically as premiums skyrocketed. States have tried to send some extra money towards the over 400% Federal Poverty Level (FPL) cohorts through either direct subsidies or through reinsurance which effectively blends in some money that is not derived from premiums with federal money that otherwise would have gone to individuals earning between 100% to 400% FPL. The last option states have is to built out alternative markets that are based on underwriting and exclusions to cover insurable risk instead of health management costs. This last choice is good for the healthy and makes the unhealthy but earning over 400% FPL worse off.
Sick and >400FPL is SOL. However combining a cap on premiums as a function of income and an underwritten market could work as I argued in March 2018:
Removing the cap on ACA subsidies so every family can access the ACA Silver plan for no more than 10 percent of its family income would provide immediate relief for Senator Cassidy’s constituents and others in similar situations. At the same time, the proliferation of underwritten plans will offer less expensive options for families without health challenges.
Patients and families will be able to choose the plans that will work for them. The ACA market will mostly cover the working poor who receive high subsidies and low deductibles, as well as the very sick who need to have comprehensive benefits and broad provider networks.
The underwritten market… will consist of healthier individuals whose premiums no longer subsidize the care of the chronically ill in the individual market.
Those costs do not disappear, as the size of the federal commitment to premium subsidies for the ACA plans will increase significantly. However, everyone will have access to health insurance with a premium ceiling and lower risk consumers will be better off.
Cliff policies are bad not because of the fall but because of the landing. The 400% FPL cliff has made many families go splat.
On the Road and In Your Backyard
Starfish
The policies on the exchanges were expensive and did not look as appealing as those offered by employers?
wvng
@Starfish: the aca was designed to provide insurance for people who didn’t get it through work.
BRyan
Where did the unsubsidized flee TO? A friend in Georgia had three companies to choose from this year — last year it was just two — all hideously expensive and crap coverage (extremely narrow networks, utter disconnect between insurance company and providers — no, we don’t take that insurance, I don’t care what the insurance company told you, etc) and would gladly join the flight from the exchange if there were options for the self-employed that didn’t boil down to “drop the insurance, take your chances.”
David Anderson
@BRyan: Lots of places:
1) Insurance through work
2) Underwritten alternatives such as Farm Bureau, Short Term Limited Duration plans, Cost Sharing Ministries
3) Uninsured
wvng
@BRyan: Hasn’t the Trump team made junk insurance acceptable again? That would be a place to flee to, and it works great if you don’t actually have a need for insurance that covers the big stuff. Which is why you need insurance in the first place.
This is all so stupid. If republicans had acted as legislators used to act, when major legislation got passed it was understood that additional legislation would be needed to make it work better. Now republicans only seek to make it work worse or not at all. After 8 years the ACA could have had a lot of initial weaknesses improved and we probably would have seen the 400% FPL subsidy limit moved up. But if wishes were ponies ….
Yarrow
@David Anderson: Speaking of cost sharing ministries, I’m guessing you’ve seen this:
dr. bloor
@Yarrow: Apparently, Colorado doesn’t seem to think that a plan consisting of a 1-800-PRAY4ME prayer hot line is legit “coverage.”
taumaturgo
@David Anderson: The 3rd option, uninsured is the GOP preferred option. Get sick and die quickly. The debacle surrounding healthcare today goes back many years and with deep roots that are embedded in racism and white supremacy idiocy.
Being aware of this horrific legacy is but one indispensable requirement for America to begin the healing process that will allow for the recognition of a measure of equality for all Americans. Remember that in keeping with history, ACA is a right-wing healthcare model adopted by Obama and the democrats.
nytimes.com/interactive/2019/08/14/magazine/universal-health-care-racism.html
“In the decades following Reconstruction, the former slave states came to wield enormous congressional power through a voting bloc that was uniformly segregationist and overwhelmingly Democratic. That bloc preserved the nation’s racial stratification by securing local control of federal programs under a mantra of “states’ rights” and, in some cases, by adding qualifications directly to federal laws with discriminatory intent.”
MoxieM
Yup! chronic illness and over the income line here. If it wasn’t covered in my divorce agreement, I would be royally f*cked. And of course I pay income taxes on the premiums I pay. Medicare can’t come fast enough for me.
p.a.
Politically, pricing/regulating/means testing the middle class out of a program then allows it to be smeared as ‘welfare’ and its future is shaky indeed.
John
I don’t know much about insurance. What I do know is that as someone who is not subsidized the cost has become incredibly burdensome. And for what? I’m glad that everyone has access to insurance but I feel like I’m being mugged at this point. $1400 a month for 2 healthy people in their 40s for insurance that doesn’t actually cover anything. One of my friends just dropped his insurance because he literally couldn’t afford it any more for a family of 5, but makes too much for a subsidy.
The problem is particularly severe in high cost of living areas, where a ton of people make over the subsidy limit but aren’t even remotely equipped to pay the ridiculous premiums.
Butch
@David Anderson: David, it may be too late for you to see this, and I didn’t want to join this discussion earlier because I’ve said the same thing so many times. We had an underwritten plan, then I foolishly switched to a Bronze plan on the exchange which has turned out to be horrendously expensive in exchange for absolutely garbage coverage. (Found a way to deny a claim for preventive and wellness care, if that tells you anything.) The Farm Bureau has underwritten policies? I’ll check that out, because I want to see Blue Cross of Michigan burned to the ground and am looking for alternatives.
David Anderson
@Butch: My only advice is to go through the fine print with a sharp toothed comb and use a trusted agent who is not a captive agent of an insurer if you want to look at the underwritten market.