Obamacare made
Consumers may face higher bills if GOP-led Congress can’t stabilize markets soon
life-saving protections available to millions. But the transformation of insurance markets has been a bumpy ride, particularly for people who get health insurance on their own.
WASHINGTON – Jim Hansen and his wife considered themselves fortunate when they retired five years ago.
The Denver couple, both electrical engineers, were healthy. They’d socked away an ample nest egg. And they found health insurance that, if not cheap, seemed reasonable for two people in their late 50s.
Then, the math started to change. Since 2015, the couple’s annual premiums have more than tripled and may hit nearly $18,000 next year.
“It just doesn’t make sense,” said Hansen.
The Affordable Care Act made life-saving protections available to millions, many for the first time. But the transformation of the nation’s insurance markets has been a bumpy ride, particularly for one group — people like Hansen who get health insurance on their own, rather than through a job, but whose income is too high to qualify for government aid.
Now, these same consumers, whom Republicans have held up as victims of the current law, stand to see insurance bills soar even higher unless Congress acts quickly to stabilize insurance markets that have been weakened by the Trump administration.
Hansen’s insurer, Cigna, plans to increase premiums for individual insurance plans in Colorado by an average of 31 percent for 2018 — one of many double-digit increases slated to hit consumers next year.
“Many of these people are just normal, middleclass folks,” said former Kansas insurance commissioner Sandy Praeger.
Praeger, a Republican, is among a bipartisan chorus of state regulators, governors and health insurance officials urging Congress to take a set of relatively simple steps to stabilize markets and help consumers such as Hansen.
A group of Republican and Democratic senators is now racing to put together legislation.
The work was derailed in mid-September by the resurgent and ultimately unsuccessful GOP push to repeal the ACA. Negotiations in the Senate health committee have now resumed, but it’s unclear whether a bill can make it through a bitterly divided Congress in time for insurers to scale back big premium hikes planned for 2018.
“They need to act yesterday if not sooner,” said Anthony Wright, head of Health Access California, a leading consumer advocate in the state.
Before the Affordable Care Act, the individual market survived largely because insurers were able to turn away sick consumers, allowing health plans to keep premiums in check for the healthy people they chose to serve.
That meant millions of Americans were locked out of coverage if they had pre-existing medical conditions such as cancer or diabetes.
But for healthy Americans, plans could be relatively affordable, especially for consumers willing to buy plans with high deductibles or limited benefits.
For the first few years after Hansen and his wife retired in 2012, they enrolled in plans that cost less than $5,000 a year.
He budgeted about $100,000 for health insurance in the couple’s retirement plan, calculating that would get him and his wife to 65, when they would qualify for Medicare, the government health plan for the elderly.
The advent of new consumer protections in 2014, including guaranteed coverage for the sick, brought consumers with untreated illnesses, many of whom couldn’t previously get insurance, into the market. That pushed up insurance premiums for healthier people.
Hansen and his wife kept their premiums in check for a couple of years by switching to plans with higher deductibles.
Then, in 2016, their annual premium for a plan with a $7,000 deductible jumped from $4,350 to $13,200.
It got worse in 2017, forcing the couple to switch plans and switch doctors.
Although the specifics of what will happen to Hansen’s plan haven’t been finalized, according to a company spokesman, the 31 percent increase the company expects on average would put the couple’s 2018 premium at $17,685.
“Something just seems way out of whack here,” said Hansen.
The vast majority of Americans receive substantial government assistance to buy health insurance.
People who get a health plan through an employer get a tax break because health benefits aren’t taxable.
Americans older than 65, who qualify for Medicare, also get help. Although they paid into the program through payroll taxes, those payments cover only part of the program’s cost, and the government significantly subsidizes the cost of care.
The poorest Americans typically qualify for nearly free care through Medicaid.
And even many of the people who buy insurance on their own now get assistance through subsidies provided by the 2010 law.
But more than 10 million Americans — some uninsured — don’t fit into any of those categories and, as a result, don’t get any assistance.
In the short term, most state regulators, insurers, consumer advocates and others say Congress and the Trump administration could slow rate hikes for people like Hansen with a few basic steps.
These include providing funding to protect insurers from high-cost patients and to offset the cost of consumers who can’t afford their deductibles and co-pays.
It also includes enforcing the law’s requirement that everyone have insurance and aggressively working to get more people to sign up for health plans. The Trump administration is instead making plans to dramatically scale back advertising and outreach efforts for 2018.
“The best thing we can do for people is to enroll a whole lot of healthy folks,” said Christopher Koller, the former insurance commissioner of Rhode Island.
For his part, Hansen said he and his wife will be able to keep paying their premiums. “For us, it’s survivable,” he said. “We’re lucky.”
But he remains perplexed by the inability of leaders in Washington to address the problem. “It seems like reasonable people ought to be able to fix this,” he said.