Cancer is the proliferation and growth of abnormal cells that, over time, can invade tissue and cause severe damage to the body’s organs. It’s often hard to spot in its early stages, but once it’s detected, it can reach a point of no return if it isn’t treated.
That’s where ObamaCare is today. It has cancer. And if it is not treated quickly and aggressively, it will die.
The cancer started to grow soon after the Affordable Care Act went into effect, but the spread was too slow to display visible damage. But now it’s detectable, and it has started to invade much of the U.S. economy and our health care systems. Here are some of the symptoms:
Declining enrollment numbers. ObamaCare was designed to provide quality health insurance to people who couldn’t afford it – and for a few years we saw a significant number of early adopters. But a disproportionate number of them were people who previously couldn’t buy health insurance because it was too expensive or because the insurance companies wouldn’t cover their pre-existing conditions. After the ACA was passed, they jumped at the chance to get insurance – and there was a benefit for them.
The projections of ObamaCare’s success were overestimated. The projections of its cost were underestimated. And we still haven’t found a way to provide health care for everyone at a price that is sustainable and ensures quality care for the long haul.
But look at what’s happening now: The projected number of enrollees for 2016 – 20 million on the federal and state health exchanges – has been cut in half to 10 million, according to Health and Human Resources Secretary Sylvia Burwell. Most of the shortfall is attributed to young, healthier individuals who have decided not to sign up. But their contribution to the system is critical, because it helps cover the losses of the older, less healthy people who participate.
If the government’s marketing efforts are successful and those who are already enrolled don’t drop out, the government predicts that 3 to 4 million people will join the system next year. But the economics that were the basis of financing ObamaCare have already been sliced in half, and there is no plan to compensate for the shortfall that will result.
Rising premiums. In the past few weeks, many state insurance regulators have approved all or most of the premium increases sought by the largest health plans in their states. When ObamaCare went into effect, many of these plans offered low rates, anticipating that they would bring in new customers.
Instead, they dug themselves a very deep hole. The customers they took on were less healthy than they expected, and they cost them much more than they’d anticipated. They priced themselves at an unsustainable rate, and now they can’t dig out because the projected number of new members has been cut in half.
You don’t need a math degree to know what a company facing this kind of loss will do to stay afloat: It will raise its prices. This change in market dynamics also has fueled a consolidation in the insurance industry, which will result in decreasing competition that will face a lot of resistance and could drive costs even higher.
The demise of the co-ops. Health care cooperatives – non-profit alternatives to for-profit insurers – were designed to drive more competition among insurers and provide more choices for consumers, especially in places where those choices are limited.
The government set aside billions of dollars in loans to prop up these co-ops, but many have failed in the last couple of months because they lacked the infrastructure they needed to market their product and they failed to understand the risk pools of the populations they were insuring.
A major flaw in government budgeting across healthcare.gov, the state exchanges and the co-ops has been the inability to forecast accurately what it will take to make new models work and keep them running. We have seen numerous explosions along the way because of this. The co-ops’ failure could indicate what will happen to underfunded state exchanges, as well.
Another key ObamaCare provision whose outcome is still in limbo is the Accountable Care Organizations, which were set up to improve the efficiencies of care.
The jury is still out on whether ACOs will be able to deliver quality care, but it is very clear that they have not received the money they need to share information across key stakeholders and coordinate care that is truly cost effective.
Employer Backlash. While the number of people without health insurance has gone down in five years from 17.5 percent to 10.7 percent, most of that is due to a vast expansion of Medicaid and to subsidies that help lower-income people buy insurance. Most of the coverage gains did not come from workers getting affordable health care from their employers.
For many employees on or near minimum wage, the plan options their employers offer are still not affordable. And in a bizarre twist, the health care law considers a worker able to afford employer-sponsored insurance if it costs 9.5 percent or less of his annual household income. But how do employers know how much the household income is when they don’t employ the entire household?
In an effort to stay afloat and not pay a penalty, some employers have resorted to coaxing their employees to get coverage from private or public exchanges. But when employees choose to go without coverage, they don’t get the care they need, and that becomes a huge problem for employers when they get sick and don’t show up to work.
At the same time, insurers are becoming increasingly reluctant to offer policies to small employers, since the employees who sign up for the insurance tend to be the ones who are less healthy and cost more. As a result, many insurers have started gaming the system – offering policies for the first year, as required by law, and then using a loophole in the law that allows them not to renew.
The projections of ObamaCare’s success were overestimated. The projections of its cost were underestimated. And we still haven’t found a way to provide health care for everyone at a price that is sustainable and ensures quality care for the long haul. There is a consistent theme in all of this: ObamaCare has cancer, and it’s spreading. Its diseased organs are now surfacing.
It’s time to recalibrate the financing of the Affordable Care Act, subject it to a rigorous analysis of what works and what doesn’t and present a new business plan that American taxpayers can live with.