As 2015 ends, it is a good time to look back and remember how much has happened with the Affordable Care Act in the last year.
Last year, Americans were happy to see a much better website that was easier to use, and took a lot less time to enroll. That was an improvement over the rough start of the first year of the ACA. The open enrollment period was to run to the end of February 2015.
However, the Department of Health and Human Services extended the deadline. This was done without Congressional approval. Anyone who found out they were going to incur a tax penalty for not having health insurance were given an opportunity to enroll so they would not face a tax in the coming year. The deadline was extended until April 15, 2015.
Consumer-operated and -oriented plans, or co-ops, are nonprofit carriers created under the ACA to compete with private insurers. There were 24 originally however, Vermont’s never opened. The 23 co-ops were given $1.2 billion in federal loans, tax payer money, to get started. In January, Co-Opportunity, the co-op servicing Iowa and Nebraska, announced it was shutting down. Since open enrollment already had begun, anyone who had opted for that plan was forced to find coverage elsewhere. By December 2015, 12 of the original 23 co-ops are ending operations. In fact, only Maine’s, Community Health Options, has been profitable. Maine recently announced its co-op will stop taking further enrollments after Dec. 15, 2015. Land of Lincoln in Illinois has taken similar actions. It has limited its enrollees to 15,000 this year and has met its quota for the year. We enter 2016 with the future of the co-ops in jeopardy.
Not only the co-ops are struggling. In April, Milwaukee-based Assurant Health announced it was closing its doors after 123 years of selling health insurance. Assurant posted a $63.7 million loss in 2014 and lost $90 million in the first quarter of 2015, prompting it to exit. In June, it stopped taking new applications. Assurant became the 14th company either to close or stop selling in the individual market since the law passed in 2010.
Not only have some companies gone under, some large companies merged. Aetna and Humana are joining forces, as are Anthem and Cigna. This further reduces the competition the law was trying to create.
In June, the ACA returned to the U.S. Supreme Court, this time testing the validity of subsidies in the federal exchange. The law was written to incentivize states to set up their own exchanges, kind of like when Medicaid began, there was federal money given to the states if they set it up. This time 36 states decided not to establish their own exchange and defer to the federal government.
The law reads that subsidies would be available in exchanges “established by the state.” The court determined that “established by the state” really meant the federal government, so the subsidies are legal regardless if the exchange is established by the state or the state defers to the national health insurance marketplace.
The bombshell dropped in September, when again Americans began receiving letters in the mail that their plans had been canceled. Many companies were canceling and moving clients to new plans. In Texas, Blue Cross Blue Shield eliminated its PPO plans and moved everyone to an HMO. In the Houston market, all carriers moved to an HMO plan. In many other states, the pattern of smaller networks has become prominent. Also, most carriers’ PPO plans no longer have an out-of-pocket maximum on out-of-network services. This almost defeats the purpose of a PPO. The idea behind a PPO is for patients to see any doctor of choice. The goal is to allow people to find the best care even if it would cost a little more. Prior to 2016, usually the out-of-network maximum was twice that of the in-network. So if the in-network was $10,000 the out-of-network would be $20,000. Now with no cap on many plans, consumers need to be real careful where you go to have treatments done.
November began the 2016 open enrollment of the third season of Obamacare. With the opening, we saw significantly higher premiums and double-digit increases in most states. Some states reported lower rates than the previous year, but because of the changes in plan structure, it is difficult to compare. Texas shows a 1 percent decrease, but most carriers no longer have PPO plans, so this means less coverage for about the same money. There are still higher out-of-pocket maximums. Prior to the ACA, it was common to get an annual rate increase and then raise your deductible to bring the premium down, and often doing that, the out-of-pocket maximum was the same. Now if a state had an overall decrease, the question becomes: Was coverage decreased as well?
In December, United Healthcare, said it was losing money on exchange business and likely would not participate next year. It also reduced plan offerings as the enrollment progressed.
With Dec. 15 being the last day to get coverage with a Jan. 1 start date, volume at the marketplace continued. The website www.Healthcare.Gov went down on the 14th and again on the 15th. Hold times were incredibly long. Due to the call volume increase to the marketplace as a result of the website being down, consumers could not get through to the marketplace, leaving consumers no way to select a plan on those days.
As we begin 2016 with the final month of open enrollment, it will be interesting to see how this plays out. Will another co-op fail before open enrollment ends? Will we see more doctors and hospitals become eliminated from networks? Are there more mergers on the way Only time will tell.
Thanks for reading.