To The Daily Sun,
Dr. Ezekiel Emanuel played a major role in crafting and promoting Obamacare. He is now admitting what has become painfully obvious: the so-called Affordable Care Act designed and marketed to the public as a cost-reduction measure, is failing by its own standards. The law isn't controlling costs.
People are feeling this is less and less insurance and just more and more, I'm paying out of my pocket. The plans offered on government-run exchanges need to be more affordable in order to boost participation rates. High-deductible plans are part of the problem. We have to focus on cost control. Affordability is absolutely critical because if we don't have affordable plans we are not going to get universal coverage. They are intimately linked. The program is not actuarially sound.
With rates rising substantially across most of the country, consumers are also being pummeled with climbing out-of-pocket costs. They're forking over a fortune before the coverage they're paying into each month even kicks in at all. When it finally kicks in many are discovering narrow networks and difficulty securing actual care.
It's telling that Hillary, godmother of Obamacare, feels compelled to offer new health care affordability proposals. We can all hold hands and chant the "it's working" slogan all day long, but her actions tell the story. Recently, America's largest private insurer signaled that it is seriously considering pulling out of the Obamacare market, citing major losses that look unsustainable over time. This is a big deal.
New enrollment projections have been slashed. A slew of state-level Obamacare co-ops have gone belly up, 12 of 23 which opened their doors, and the rest, as a group are losing money ... an estimated $200 million. The adverse selection problem arising from older, sicker risk pools is real.
For UnitedHealth, claims data have been getting worse as time has gone on, and there's no evidence pointing toward improvement. Their assessment is that that the company cannot sustain these losses. They can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself.
2017 is significant for insurers, because that's the year when several programs designed to mitigate risk for insurers through federal backstops go away. The hope was that those programs would act as training wheels for Obamacare in its first few years. After that, the insurers were supposed to be able to thrive on their own.
UnitedHealth's statement suggests otherwise. If UnitedHealth and other insurers decide to exit, remaining insurers will be forced to take on even more high-risk enrollees, prompting them to either raise rates further or exit themselves. That's how a market "death spiral" begins.