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2018 Exchange Premiums

By October 26, 2017October 27th, 2017Commentary

The insurance exchanges were to be a fundamental method by which the ACA (misnamed as health “reform” law) was to expand health insurance availability and coverage.   That hasn’t quite worked out and availability and affordability continue to decline.   (Avalere Analysis)   The analysis focuses on the Silver level health plans, which are the benchmark for subsidies for lower-income individuals.  The average increase in these Silver plans will be 34%, with a wide range from 69% in Iowa to a decrease of 22% in Alaska.  Many enrollees are subsidized and if they pick the lowest premium Silver plan, the subsidies will allow them to avoid actually picking up the premium increase.  The taxpayers aren’t so lucky, and if you have enough income to not be subsidy-eligible, then you are SOL and may decide not to get insurance, since the current Administration isn’t interested in penalizing you for failure to do so.

In out ever more politicized world, of course the news about premium increases is blamed by some on the current Administration, particularly for threatening to end, and then ending at least temporarily, the “cost-sharing” payments to insurers.  Those payments were not part of the actual legislation.  They were made up after the fact by the Obama Administration as a bribe to induce insurers to participate on the exchange.  They have no legal basis and likely would eventually be found improper by the courts.  Health insurers should have to have the actuarial and marketing skills to figure out what their population and its health costs are likely to be.  If they can’t, they are incompetent and they deserve to lose money and if they stay incompetent they should go out of business.  Why are we helping massive businesses and their shareholders by guaranteeing them a profit?

The real problem is the stupid design of the reform law and the hubris of those who passed it to imagine that they could simply dictate how a market should work.  Better to admit failure and start over.

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