Concerned about consumer costs and under-enrollment, President Obama is asking Congress to consider a public option to the Affordable Care Act (ACA). It would apply particularly where ACA health insurance exchange offerings to consumers are limited, such as in rural communities.
Steering Toward Less Choice
However, opponents nationally and in Washington state say ACA’s overbearing regulatory approach has already driven up costs for insurers and consumers, and hurt choice. More government intervention, they add, would further discourage private insurers from competing, and further limit health care options.
In a Journal of American Medical Association (JAMA) article published in July, Obama wrote, “Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited.”
Melanie Coon is senior communications manager, public affairs, for Premera. She told Lens the insurer is trying to make the ACA work as it is written in Washington. “It would be unfortunate to bring in new components and changes and take focus from trying to make the existing program work better,” said Coon.
State Rep. Joe Schmick (R-9) told Lens that ACA has done little to help access to care in rural Washington, and the public option would be a step closer to a broader and more injurious single-payer system. “If you’re going to allow that…the government is going to dictate what is going to be covered and how to much to pay,” which forces doctors to take less money, said Schmick.
Among the biggest problems with ACA is its heavy-handed regulatory framework which has restricted insurance premium pricing differentials based on age and health, and mandated insurance benefits increases, according to a policy brief by Yevgeniy Feyman, fellow at the Manhattan Institute.
Consumers, Providers Already Hurt By ACA
This puts pressure on exchange insurers who then must pass along the added costs to consumers with higher premiums, and to providers with lower reimbursements.
Little wonder then, as the The New York Times has reported, that small business owners who supported ACA have been dismayed to learn many providers won’t accept Obamacare exchange plan coverage for patients’ healthcare services. Private plans provided by employers fare better.
According to an analysis by the Kaiser Family Foundation, an estimated 664 counties across the country could have only one exchange insurer for 2017, and 462 of the projected counties would be deemed “mostly rural” areas. In 2016, 225 rural and urban counties had only one exchange insurer.
Expanding coverage for those in rural areas via a government option seems like a false pretense, Chris Free told Lens. He is principal for Rapport Benefits Group, an employee benefits consulting firm in Tacoma.
He said, “the government program can run completely as a non-profit,” which would reduce options in rural areas because insurance companies will not want to compete.
Competition Would Shrink Further
Dr. Roger Stark, health care policy analyst for the Washington Policy Center, told Lens implementation of a public option would diminish competition from non-public health care providers, similar to the effect on private providers serving the elderly when the U.S. government’s Medicare program gained a foothold.
“There was a moderately robust private insurance market in the 1960s for seniors. And by the 1970’s that private market was gone because you can’t compete with the government, from the private industry standpoint,” said Stark.
The president argued, “Too many Americans still strain to pay for their physician visits and prescriptions, cover their deductibles, or pay their monthly insurance bills…and (too many) remain uninsured.” Obama cited a study which showed that 79 percent of surveyed adults who were looking for health insurance, indicated they could not afford a plan after considering all options.
It is true that ACA exchange enrollment has slowed greatly, particularly among eligible middle-income adults. Because of rising premiums they are opting to skip coverage and pay the so-called “individual mandate” tax instead, The Manhattan Institute’s Feyman wrote.
That tax in 2016 is $695 per adult and $347.50 per child, and up to $2,085 per household, or 2.5 percent of household income above a certain threshold, whichever is more.
ACA ‘Not Working As Intended’
Obama’s article in the JAMA “serves as a tacit admission” that ACA “is not working as intended, particularly when it comes to competition,” according to Peter Suderman, senior editor at Reason.com.
Suderman wrote there is little reason to believe a government-run public option would fare much better than Obamacare’s failing co-ops.
“It would, however, be much harder to shut down, and much more likely to be propped up by additional federal funding…leaving an ongoing cost to taxpayers rather than the one-time hit incurred by the failures of the co-ops,” said Suderman.
Only seven of the original 23 co-ops remain. Three co-ops shut down within a two-week period this month.
Stephanie Marquis, spokesperson for the Washington Office of the Insurance Commissioner, told Lens the state exchange Healthplanfinder has more choices compared to some other states, where only one or two insurers are available.
Free told Lens one main problem with the Washington exchange involves the SHOP (Small Business Health Options Program) marketplace, designed for small businesses of up to 50 employees.
In 2017 “we won’t have a statewide carrier for our shop exchange. It has failed and some clients will no longer have health care,” said Free.
These employers will have to shop for coverage outside of the exchange. If they had any tax credits they won’t be able to access them, Free told Lens, and they would have to pay full cost for benefits.
Washington State Sen. Jan Angel (R-26) told Lens Washington’s exchange asked for millions of dollars to continue running when the legislature left Olympia last session.
Said Angel, “That’s one of the things we are going to have to look at: how do we finance this and is it sustainable? We need to see how can we put some reforms in there, but if you get the government back involved in the insurance side of it we are going to have a debacle.”