In the beginning, insurers were prepared to balk at entering the exchanges. Without the ability to adjust for the extra expense associated with patients who have poor health histories, and the unknown quantity of the pool of patients in the healthcare.gov plans, insurance companies feared the exchanges would be a losing proposition. The Obama Administration sought to allay concerns, and gain support, by promising assistance to compensate insurers for losses. As it turned out, insurers were right to be nervous. The young and healthy avoided the exchange plans, so they were heavily populated by older, sicker patients. Then, Republicans in Congress moved to block any subsidies to insurers who experienced losses on the exchanges, seeing the subsidies as a clear case of crony capitalism. With the 2017 enrollment period quickly approaching, many insurers see the handwriting on the wall, and want out. Aetna lost $200 million on exchange plans in 2nd quarter 2016, and projects $300 million lost by year’s end. Those insurers that do remain will survive by offering narrow choices of doctors and hospitals, and higher premiums, deductibles, and co-pays. Not exactly the definition of, “If you like your doctor, you can keep you doctor”.
“Medicare for All” sounds like a great alternative, until you consider that the program only takes in 13 cents of premium payments for every dollar of care delivered. That’s not sustainable either, unless care is rationed, and doctors and hospitals are willing to do more work for even less pay.
It’s time politicians admit they were wrong in believing they could ignore basic rules of economics, and common sense. The way to promote competition in the health insurance market is to put the checkbook back in the hands of consumers. Refundable tax credits and expanded Health Savings Accounts would empower every individual and family to demand better care, better options in insurance, and an informed role in every decision. Insurers, doctors, and hospitals should have to compete for the business of every patient, not bypass them to negotiate with employers or the government. Innovators would develop new, more efficient ways to deliver better care, free from the excessive administrative constraints and regulations of bureaucracies like the Department of Health & Human Services
The free market works for every other segment of the economy. It’s past time politicians admit they were wrong in thinking they could do a better job.