Recently the Blue Cross Blue Shield Association published a report detailing the effects of the Affordable Care Act legislation on consumers and insurance companies. Now granted, the BCBSA is a conglomeration of independent BCBS insurers so we must read the document with a pinch of skepticism. In the analysis, the BCBSA collected data of every individual market health insurance carrier and product sold in the US.
Major Points to consider from the report:
–Choice of carriers declined in all markets
United Healthcare (UHC) has confirmed that it will be dropping out of a majority of ACA exchanges in 2017. While posting a predicted loss of $650 million dollars in 2016 (after a loss of $475 million in 2015), United executives are concerned that more losses are on the way if they continue to insure the Obamacare pool of patients. With the departure of UHC, many worry that choice will decline even further—some areas may only have as few as two choices. Ultimately, this move will drive prices even higher for exchange participants. Fewer choices almost always result in less competition –less competition can lead to lower quality products and care. According to a study conducted by Kaiser, the impact of shrinking choices in the marketplaces can be very significant—particularly in southern states and rural areas. United accounts for nearly 71% of all enrollees currently and 29% of counties that are currently served by Untied would only have ONE choice of carrier if UHC pulls out. Overall, 1.8 million enrollees will be left with 2 choices of carrier and 1.2 million will have only ONE choice.
-New enrollees received significantly more care and those insured by the exchanges had costs nearly 25% higher as opposed to those insured via employers
Not surprisingly, those enrolled in the exchanges accounted for more emergency room visits, more inpatient admissions, more prescription drug costs and inpatient admissions than those that were insured in traditional employer based systems. Many Obamacare enrollees have waited until a major illness occurs before signing up and gaining access to care. Once treatments are completed, many of these same patients simply drop out—thus skewing the insured pool to those with higher costs–with fewer “young and healthy” patients on board to help fund the more expensive treatments required by many of the newly insured.
–New enrollees are much sicker—More Diabetes, heart disease, HIV and Hepatitis C
Over the last three years, it has become apparent that new enrollees in the exchanges tend to have more medical problems. Many have gone without treatment for a long time prior to acquiring insurance. These patients often have very advanced disease (along with multiple disease related complications) and by the time they gain access to care and most require expensive, intensive treatments. Newer drugs for diseases such as hepatitis C are priced exorbitantly and costs for a 12-week course of therapy can reach $80 thousand dollars or more. Obesity and obesity related illnesses are epidemic in the US today. Obesity places patients at risk for diabetes, heart disease and other potentially debilitating and costly chronic diseases—accounting for 150 billion dollars of healthcare expenditures in the US annually. Until we focus on preventative efforts and individual accountability these costs will continue to rise.
What is to be done to save healthcare in the US?
We must revamp the system. This job will require Congressional action and actual bipartisan cooperation and support. Moreover, both the legislative and executive branches of government will have to come together and actually compromise in order to stop the implosion of the best healthcare system in the world. While providing expanded access to healthcare for all Americans is an important goal, we must develop a system that rewards good health choices and focuses more on disease prevention. We cannot expect, nor rely on, young healthy Americans to completely fund healthcare those who do not even attempt to modify risk and engage in their own healthcare. We must set up a system of individual accountability where premiums are tiered based on health choices—lower premiums for those who DO NOT smoke, those who exercise and those who avoid other high risk behaviors for example. At best, healthcare in the US is headed for disaster. Unless we can address the rising costs, diminishing choice and pending physician shortages we will soon become a single-payer system—just ask the Canadians how well that has worked out north of the border….