Why were some increases still expected this year? Health care costs continue to rise, insurers are still adjusting to the market, and outside factors — like the return of the ACA’s health insurance tax after a one-year moratorium — would have driven prices up.
The health care law’s markets for individual health plans certainly had flaws before Trump was elected. The ideal scenario the Affordable Care Act’s architects envisioned — one in which every American who didn’t get insurance through work and Medicaid or Medicare would shop through the law’s exchanges for a plan, creating a robust market of healthy and sick, young and old — didn’t materialize.
The law was very effective in drawing in people with lower incomes, who qualified for generous financial aid that kept their premiums as low as $100 or $200 per month. Of the 10.3 million people who signed up through the Obamacare marketplaces last year, 8.7 million received federal assistance.
And millions of people who were previously excluded from the individual insurance market had a chance to buy health coverage for the first time after the law ended discrimination based on a person’s medical history. That had been an explicit goal for Democrats when they passed the ACA.
But those changes had consequences. Those new customers had a lot of health care they needed or wanted to get. Data from insurers showed that the new ACA enrollees were receiving significantly more medical care.
“We’re all aware there was some pent-up demand within the population — maybe a little more pent-up demand than many carriers expected. A lot of carriers might have underpriced in 2014,” UPMC’s Pittler told me. “But that pent-up demand started to go away a little bit. We educated people on how to utilize health care.”
At the same time, insurers struggled to attract younger and healthier people who would pay in premiums but typically wouldn’t spend as much on care. They were seeing higher rates than they had in the pre-ACA markets, and many experts believe the law’s the individual mandate, which was supposed to compel everybody to sign up, was too weak to have the desired effect.
That meant the markets had to adjust, and they did. Plans hiked their prices to cover their costs, knowing that the millions of people who received subsidies would be protected by the law’s design. But for Americans making too much money to get assistance, they faced the full force of those increases.
“We have just not done a good job of getting healthier higher income people into the ACA,” Craig Garthwaite, a conservative health economist at Northwestern University, told me. “I have grown increasingly pessimistic that we’ll have the non-group market that I thought the ACA would be.”
So the markets weren’t perfect, and they weren’t working well for many people who didn’t receive any financial aid to offset the premium increases in the initial years.
But Obamacare wasn’t imploding either. It had a committed market made up of millions of people who receive the law’s generous subsidies.
“If your definition of market stability is an efficient pool giving people the lowest possible rate base, we aren’t even in sight,” Laszewski said. “But is there a death spiral? There isn’t a death spiral because the subsidies keep the subsidized people in the pool.”
And after a few years of experience, experts generally agree, insurers had a much better handle on who the ACA customers were and what their care would cost, which should have made price increases going forward more predictable and manageable.
“I think at this point, the experience factor in all of this has improved a lot,” Molina said. “Actuaries feel much more comfortable about who the patients are, what services they need.”
That was the world as it would have been if Hillary Clinton were president or perhaps a Republican less inclined to blow up Obamacare (John Kasich?) were in the White House.
But that is not the world we live in. Donald Trump is president — and he wants Obamacare to implode.
“The biggest difference, I believe, is you would have an administration actively interested in making things work and work over the long term,” Anderson told me.
Or as Garthwaite put it: “Some of the uncertainty would have existed even without Trump. But Trump has definitely exacerbated it.”