The Affordable Care Act (ACA) isn’t working. At least, it isn’t working for insurance companies. Millions of people have signed up for health care in the marketplaces and are receiving services at an unprecedented cost to the major insurance companies. Insurance companies are reviewing their medical-loss ratio and are seeing losses in revenue. The Wall Street Journal reported on Thursday, July 27,2016 “ The ACA-plan results helped worsen the insurer’s (Anthem) overall medical-loss ratio, a closely watched measure that reflects the share of premiums spent on medical expenses” (1). These losses are prompting drastic moves by health insurance companies, including increasing premiums and reducing or removing their health plans from the marketplaces. The Wall Street Journal reports UnitedHealth Group, Inc is withdrawing almost completely and Humana Inc. is pulling back sharply in 2017 due to losses in the marketplaces(1). The increase in cost combined with a decrease in health plan options decreases access healthcare. Healthcare is a fundamental right. Once insurance companies are granted the ability to increase premiums and decrease plans in the markets they are creating a deficit in society.
Each year health premiums have increased under the ACA because insurance companies have requested premium increases to help buffer losses which result from being active participants in the ACA. It is projected in 2017 the two most popular healthcare plans in the marketplaces will increase their premium costs. In a study the Kaiser Family Foundation compared the monthly cost of the lowest cost Silver Premiums, the most popular of the healthplans in the marketplaces, and found the increase rate requests from insurance companies are at an estimated weighted average of 9% for 2017 (2). In 2016 the weighted average cost per month was $257 (2). If the increase premium request is granted the weighted average monthly cost will be $281 (2). Insurance companies cite the ongoing cost of care and the inability to refuse insurance to those with chronic health issues as the reason for their medical-loss ratio and as a reason to increase premium costs(1).
The requests made by the insurance companies pose a two pronged threat to public health. By raising premiums and reducing their health plans on the marketplaces, companies are decreasing access to health care for the individuals who are the most vulnerable to either being underinsured or not insured at all due to the cost of health care. These individuals are reliant upon the health care marketplaces created by the ACA for affordable healthcare options. Any increase in cost or reduction of choice will strain an already tight budget for most, while eliminating the ability to pay for healthcare for others.
The ACA is flawed because it allows for premium increases at rates many cannot afford and it allows companies to reduce their healthcare options or remove them completely from the marketplaces. For a society to progress the individuals must be healthy. It is because of this I propose the ACA be revised to meet the needs of the people. What is needed are incremental increases in premiums which allow the individual to either switch plans or budget for the increase while also allowing insurance companies the ability to recover from year end losses. To make this possible, society must rethink how it views revenues and losses. A priority on health and its benefits to society needs to be understood. When individuals are healthy they are more productive, seek higher education, and become more involved in their community. Access to healthcare increases benefits to society.
References.
Mathews, Anna Wilde (2016, July 27). Anthem Projecting Losses on Affordable Care Act Plans This Year. Wall Street. Retrieved Journal. from http://www.wsj.com/articles/anthem-raises-outlook-reiterates-cigna-purchase-plans-1469617063.
Cox,Cynthia, Claxto,Gary, Levitt,Larry, Long,Michelle, Gonzales, Selena and Sroczynski,Nolan. (2016, July 28). Analysis of 2017 Premium Changes and Insurer Participation in the Affordable Care Act’s Health Insurance Marketplaces. The Kaiser Family Foundation. Retrieved from http://kff.org/health-reform/issue-brief/analysis-of-2017-premium-changes-and-insurer-participation-in-the-affordable-care-acts-health-insurance-marketplaces/.