Although the percent of Washingtonians without health insurance has dropped from 14.5 percent in 2012 to 7.3 percent in 2014, simply finding coverage isn’t a health fix-all. Rising costs and other challenges for the insured underscore that the best medicine is often prevention.
According to the Centers for Disease Control and Prevention, health care coverage is only one of many determinants of population health. “Having a primary care doctor, eating enough nutritious food, (having) access to…active lifestyles…as we think about investing in prevention efforts, those things are equally important,” versus having healthcare, said Alison Carl White. She is executive director of the Spokane-based non-profit Better Health Together.
White said that the organization is seeing promising practices in prevention, such as two-for-one deals at farmer’s markets to encourage Medicaid beneficiaries to have more fruits and vegetables. She said that eating better is a direct return on costs they’re paying for their coverage, especially those struggling with diabetes and heart disease.
Insurance Companies Leaving the Individual Market
Even with growing emphasis on prevention through healthy habits, concerns are growing about consumer options for health coverage. Washington has been among states affected by pullbacks in market offerings for individual plans.
UnitedHealth announced in April that it will leave health insurance exchanges in 22 states, including Washington. The decision is part of a national trend stemming from rising healthcare costs and financial losses for insurers since implementation in 2010 of the Affordable Care Act (ACA), also known as Obamacare.
The Kaiser Family Foundation determined that UnitedHealth’s move would mean 41 percent of Exchange enrollees in Washington would only have one insurer option instead of two.
The Puget Sound Business Journal reported Premera lost $117 million on individual health plans last year, leading the insurer to announce that it would stop offering the plans in 12 Washington counties.
Melanie Coon, senior communications manager and public affairs for Premera, told Lens that the non-profit licensee of Blue Cross/Blue Shield found it difficult to maintain cost-effective care for certain rural counties in the state. She explained that’s because customers there have a harder time negotiating health care costs, due to the lower number of providers available.
Rather than withdraw from markets, some other insurers are raising the cost of premiums for coverage. Thirteen health insurers in Washington requested an average 13.5 percent increase in premiums for 2017 to help offset rising costs.
‘Young Invincibles’ Drive Costs Up
There is also concern about what appears to be ACA’s fundamentally flawed financial model tied to insufficient demographic diversity in the health insurance marketplace. Younger rate payers subsidize older and more frequently ill or ailing individuals, but participation in ACA by this younger demographic is too low. This adds to the cost burden for all those who are insured.
Sydney Smith Zvara, executive director of the Association of Washington Healthcare Plans, said some young people don’t want to spend money on coverage and would rather go ahead and take their chances. “When you don’t have a good representation of young people in the pool” that makes policies more expensive across the board, said Zvara.
State Rep. Joe Schmick (R-9) told Lens that 30 to 35 percent of the pool needs to include the young, healthy insureds. In reality, Schmick said that only 12 to 15 percent of them are getting insurance through Washington’s Exchange.
Heavy demands on the pool and not enough young adult members means dramatic increases in premium costs, which Schmick said has been the trend since adoption of the ACA.
There is little in the ACA that addresses the question of escalating healthcare costs, said Dr. Lanhee Chen. He’s a Research Fellow of the Hoover Institution at Stanford University, and spoke at the Solutions Summit presented by the Washington Policy Center (WPC) last month in Bellevue.
Chen said that out-of-pocket spending is going down and that “creates greater opacity in the healthcare system,” driving overall health spending higher.
According to Chen, individuals who don’t spend as much out of pocket aren’t as sensitive to how much they spend. He added, they may very well decide they want an extra magnetic resonance imaging (MRI) scan or another procedure that is not really needed.
Dr. Roger Stark, health care policy analyst for WPC, said, “The ACA has helped some people, but it has not come close” to achieving its promise to offer affordable healthcare to every American.
“The law is too complex, too expensive and clearly imposes too large a regulatory burden on Americans. The reality is that Obamacare decreased the number of uninsured by simply expanding the Medicaid entitlement, while forcing health insurance premiums higher for everybody else,” said Stark.
The 70 policy changes to the ACA so far illustrate the “questionable value” of the law, Stark added.
An Overwhelming Medicaid Expansion
The implementation of Washington Healthplanfinder accounted for an estimated 157,500 newly-covered residents from 2012 to 2014. The adoption of the Medicaid expansion, which changed the qualifying income ceiling from 100 percent to 138 percent of the federal poverty line, brought in 680,000 newly insured during that same period, according to the Washington Office of the Insurance Commissioner.
Schmick said the ACA caused an unexpected rise in people signing up for Medicaid because healthcare plans can no longer screen people for health or preexisting conditions.
Approximately 87 percent of Washingtonians are using Washington’s Exchange for Medicaid enrollment, according to Schmick, and 13 percent of Exchange users are purchasing qualified health plans and getting the subsidy.
Schmick said the issue lies with who should pay for the funding of the Exchange, and that Medicaid should be covering more of the cost.
Schmick told Lens that people buying qualified health plans are being charged around $8 a month per person, and Washington taxpayers are providing $100 million to fund the exchange over the biennium ending 2017.
Stark said that the Washington Office of the Insurance Commissioner neglected to mention that despite gains in insured residents, 290,000 Washingtonians lost their preexisting health insurance and were required to buy new insurance.
Chris Free said this happened with those covered under Moda Health. Moda was in the Exchange last year and wasn’t this year, requiring everyone insured by Moda to move to a new insurance carrier. Free is principal for Rapport Benefits Group, an employee benefits consulting firm in Tacoma.
“All of their doctors may not be covered by the new carrier,” Free told Lens. “If people lost doctors in the process, they might need to find new doctors” and become more pro-active in re-establishing satisfactory relationships and receiving appropriate care. This can lead to increased visits and increased costs across the system, he said.
Free said businesses can cut down on healthcare costs by buying less insurance and funding claims directly themselves through some sort of self-funded model. It won’t slow down the increasing cost of care across the board, he said, but it allows employers to lessen costs in many situations.
According to Free, it’s unrealistic to think we will have a year where healthcare costs drop by ten percent. Instead, he recommends working toward slowing the rise to two or three percent annually.
Health savings accounts (HSAs) are a powerful tool for the average citizen, Free told Lens. Unlike 401(k) accounts, HSAs allow money to be taken out of wages without being taxed, so long as it is used for medical expenses. Free said he encourages young, healthy people to start putting money away into HSAs, so it can grow over time and really benefit them in the long run.
Schmick said one option to explore would be purchasing healthcare across state lines to offer more options for residents. Coon noted that Premera is focusing on personal care plans and making sure premiums are affordable for its members by having conversations with doctors and clinics who have the same goal in mind.
Washington has a very complex and fragmented system of healthcare coverage and people need help navigating it, according to Zara. “I’d like to see more tools, either education done by the state, insurers or the Exchange, to help people understand how to figure out what coverage is best for them” and how to optimize resources in a plan, she said.
The National Center for Policy Analysis (NCPA) has recommended repealing the ACA’s mandates and taxes, and replacing the law with “increased flexibility in health plan design.” NCPA suggests allowing consumers to choose their own coverage and have access to “more flexible investment choices” in their HSAs. Other suggestions include reforming the process for approving drugs, expanding care coordination to better serve “Medicare’s sickest patients,” and allowing states to control their Medicaid programs.
Additionally, NCPA’s “Alternatives To Obamacare” policy recommendations include:
- incentives for more price transparency by, and payment assurance for, providers;
- making medical licensing in the U.S. easier for foreign medical graduates;
- removal of more telemedicine barriers;
- and a broader scope of allowed work for advanced practice nurses and physicians’ assistants.