Now that the dust has settled and the major legal challenges involving the Affordable Care Act are over, lawmakers and the public should focus their attention on whether the law is delivering on its original promise of healthcare affordability.
There is no doubt that there are people who are benefiting from the ACA. But that is only part of the story. The reality is that Arizona has neither seen the expected, dramatic reduction in its uninsured nor the promised decline in premiums.
What the state has seen is a lot of churn between types of coverage. Many of the exchange enrollments and Medicaid sign-ups are people who are substituting taxpayer-funded coverage for their previous private health insurance.
Arizona has, at best, reduced the state’s uninsured population by a mere one-fifth to one-quarter, which is a far cry from reducing the uninsured by half in 2015, as some ACA proponents in Arizona predicted. A 2011 report for former-Gov. Brewer estimated that the state’s overall uninsured rate would eventually drop to 11 percent from 19 percent.
Depending on the survey, it is estimated that the ACA has reduced the uninsured by about three percentage points – from about 20 percent to 17 percent. In addition, there is no indication that Arizona health insurance premiums will ever decline by $2,500 per year for the average family, as the president repeatedly promised. In fact, the opposite is occurring.
According to the most recent rate submissions for HealthCare.gov premiums will continue to rise. For example, Blue Cross Blue Shield of Arizona is requesting rate increases ranging from 17.8 to 26.6 percent for twelve different policies in 2016. There is every reason to believe that these types of premium increases will only continue.
A little-known, but important, ACA provision allows insurers to recoup financial losses incurred in the HealthCare.gov insurance exchanges. Known as “risk-corridor payments,” money is pooled from each insurer and added to revenue from an ACA tax on health-insurance plans. But since these “bailout” payments will stop at the end of 2016, insurers will no longer be able to rely on this “cushion.” That is why we should expect even larger rate increases in the coming years.
The sooner that lawmakers on both sides of the aisle acknowledge that the Affordable Care Act needs changes, the better. One place to start would be allowing states to regain control over our own insurance markets and offer a wider array of health insurance products — especially those with more lower-price options, most of which are no longer available as a result of the ACA.
A potential avenue for achieving this reform might be found in the ACA itself: Section 1332 waivers – known as “State Innovation Waivers” – are available beginning in 2017. Arizona should pursue exemptions from some of the most arduous insurance regulations of the law, which are responsible for much of the increase in health insurance premiums. Additional congressional action clarifying this provision is still needed, but the basic framework for more Arizona control over health insurance is already in place.
Arizona needs more flexibility, not more Washington-knows-best edicts when it comes to understanding and addressing Arizonans’ health care needs. The Obama administration is now gearing up for the third open enrollment period that will begin on November 1, but there is no reason to believe that this time will be any different when it comes to health care access and affordability.
The ACA has failed to deliver on its most basic promise: making healthcare more affordable. That is why lawmakers on both sides of the aisle ─ and in capitols across the country ─ continue to have the responsibility to pass meaningful healthcare reform in a way that respects taxpayers, provides a basic safety net, and addresses healthcare costs.
— Naomi Lopez Bauman is director of healthcare policy at the Goldwater Institute (www.goldwaterinstitute.org).