Obamacare Rate Increases Aren't the Federal Government's Problem

If you are one of the 13 million Americans who get their health insurance through the healthcare exchange (via the Affordable Care Act, aka Obamacare), you probably already heard the bad news: Some premiums are due to go up next year.

And if you are one of the 22 million Americans who are self-employed, don't have employees and rely on the national program (also called Obamacare) for your healthcare, this could seem like big news. Prior to Obamacare, many self-employed individuals either obtained insurance through private associations like the National Association for the Self Employed (NASE) or through a second job. Or they were unable to afford health insurance, period.

Of course, one of the reasons this announcement was such a headline-grabber is that most of the media coverage neglected to remind us that rate increases were a mandatory requirement by insurance companies when they agreed to lower their rates for the first year of ACA. That by no means should be a criticism of the Obama administration's efforts: Any experienced business owner knows that it takes time to build up revenue and clientele when starting out. Why would it be any different for the businesses benefiting from the country's first national healthcare plan?

And premium increases are far from new under this healthcare exchange. In a 2012 decision, the Supreme Court determined that states could legally oversee their own healthcare exchange. And this contributed to big premium spikes in 2016. That's right -- spikes may be states' fault for failing to regulate insurance companies when they choose to separate from the feds.

Although YourHealthIdaho.org projected across-the-board increases of around 25 percent for 2016,  some residents in North Idaho received as much as a 400 percent markup last year that the site described as a "premium increase. " (Disclosure: This writer was one of them.) According to one insurance carrier, it wasn't the lack of enrollees that forced companies to raise rates. In fact, it was the popularity of the healthcare marketplace and cost of providing health and wellness checkups that caused rates to spike. Of course, these are the very issues that insurance carriers claim should lower costs for both the insurance company and the patient.

But with all this water under the bridge, premium increases may not be the real issue of concern. According to U.S. Department of Health and Human Services Secretary Sylvia Mathews Burwell, the rising costs aren't just due to the fact that carriers are still "trying to adapt" to the national mandate or that they are forced to compete "according to price and quality." "Efforts to undermine the ACA, such as certain states’ decisions not to expand Medicaid and Congressional actions to block funding for the law, contribute to higher premiums as well," Burwell said.

I wonder if Burwell shouldn't have added to that many of the states that did not expand Medicaid have some of the greatest problems in making sure insurance premiums remained stable or affordable. Idaho Health is careful to tell prospective enrollees, "The Idaho Department of Insurance does not have the authority to disapprove or establish insurance rates." It can negotiate with insurance companies, and it can say whether it feels rate increases are justified in its view. But in the end, the insurance carrier has the final say about what it charges.

And as consumers discovered in Arizona -- where rates are expected to rise 116 percent next year, including in areas served by only one or two carriers -- affordability once again is dependent upon state oversight and advocacy on the part of the consumer.

It is consumers' right to expect health coverage won't discriminate against certain age groups that may be more vulnerable to health issues. This includes states that historically fought to keep the ACA from being enacted. In 2010 Arizona joined forces with 25 other states to sue the newly established Act. The states argued, among other things, that Congress was exceeding its authority under the Federal Commerce Clause. The eventual outcome was more say for states in regulating their own healthcare marketplaces. But did it help consumers ensure they could afford health care? Apparently not.

On the eve of one of the most contentious elections in history, consumers are left wondering why the healthcare provisions that were designed to keep insurance affordable are being undermined by rate increases. Maybe it's not the federal government that needs to step up to address consumers' expectations, but the states that will once again be forced to absorb greater overhead if consumers can't afford to buy adequate health insurance.

Image: Flickr/Philippe Put