Is the Affordable Care Act Actually Failing?
For almost eight years, we have heard about the horrors of the Affordable Care Act. A recent shift in the Republican messaging on the ACA has been that it is failing. This message has come from the House and Senate, as well as Republican leaders like the Speaker of the House and the President. And with news of insurance carriers leaving marketplaces across the country, and the individuals leaving the marketplace leading to a death spiral, it is not hard to believe it. But how true are these claims really?
In late June, the Center for Medicare and Medicaid Services, part of the Department of Health & Human Services lead by Trump pick Tom Price, released a report about insurance payments in regard to the Affordable Care Act.
This report contains some interesting information. Most notably, is the section offering evidence that the insurance marketplaces created by the ACA were stable in 2016 compared to 2015. Furthermore, the report details that a healthy mix between the sick and healthy exists in these marketplaces, eliminating the possibility of a death spiral.
The CMS report found this information by looking at risk adjustment payments, which were introduced into the law to help “protect against the negative effects of adverse selection and risk selection.” Essentially, these payments prevent insurers from only selecting healthy enrollees by sharing money among plans with healthier members to plans with higher risks. In order to determine these payments, the government assigns risks scores to individuals based on their demographics and health status and then averages them all together to receive a score for the plan.
These averages were stable in 2016. This is great for insurers and the marketplaces. Nothing worries insurance companies more than uncertainty, and stability in plan members could lead to more stable premiums.
This does not mean the marketplaces are perfect, however. There is evidence that, while helpful, they are not working for everyone. Some states, as mentioned previously, will only have one insurer in their marketplaces in 2018. There are also millions of individuals who do not qualify for insurance subsidies but don’t make enough money to purchase insurance on their own.
As healthcare reform has stalled in the Senate, President Trump has vowed to “let Obamacare fail,” but there is little evidence that will happen anytime soon.