Minnesota’s Democratic governor said Wednesday that the Affordable Care Act is “no longer affordable,” a stinging critique from a state leader who strongly embraced the law just a few years ago. Gov. Mark Dayton made the comments while addressing questions about Minnesota’s fragile health insurance market, where individual plans are facing double-digit increases after all insurers threatened to exit the market entirely in 2017.
They follow cost concerns and criticism nationwide, including President Bill Clinton saying last week that the law was “the craziest thing in the world” before he backtracked. “The reality is the Affordable Care Act is no longer affordable for increasing numbers of people,” Dayton said, calling on Congress to fix the law to address rising costs and market stability.
The Democrat-driven criticism has emboldened Republicans in Minnesota and nationwide to try to scrap President Barack Obama’s 2009 law. Clinton faced backlash for his comments during a Michigan rally for his wife last week, and he later clarified his support for the law and called for fixes to address gaps in coverage.
Few states embraced the health care law stronger than Minnesota under Dayton, where lawmakers created a state-run online market exchange for shoppers who aren’t covered by employers or public programs to buy individual coverage. When those policies first went on sale in 2013, Dayton and state officials proudly touted the lowest health insurance rates in the nation.
But after several years of steadily increasing premiums, top state regulators said this fall that Minnesota’s individual market is in “a state of emergency.” The state scrambled to stop all seven companies that sell insurance directly to consumers or through the state exchange, MNsure, from fleeing for 2017, but the state’s largest insurer is still exiting.
Health care insurance shoppers will see premium increases that range from 50 percent to 67 percent on their plans for next year.
Across the nation, insurers have sought double-digit premium increases while major companies — including Aetna and UnitedHealth — have pulled out of many state-based exchanges for 2017, after forecasting heavy financial losses. The Obama administration portrays the premium increases as a one-year market correction that can be absorbed or offset by larger financial help through tax credits.
Minnesota lawmakers are mulling potential fixes to get costs under control and ensure the individual market can survive. While Dayton said that’s worth considering, he said the bulk of the problem lies at the federal level. “It’s got some serious blemishes right now and serious deficiencies,” he said.
As I just mentioned, Bill Clinton criticized President Barack Obama’s signature policy reform Monday while on the stump for his wife, Democratic presidential nominee Hillary Clinton, calling Obamacare “the craziest thing in the world.” But he attempted to temper his criticism at a Tuesday rally. Speaking at a Democratic rally in Flint, Michigan, the former president ripped into the Affordable Care Act (ACA) for flooding the health care insurance market and causing premiums to rise for middle-class Americans who do not qualify for subsidies.
“So you’ve got this crazy system where all of a sudden 25 million more people have health care and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world,” Clinton said.
On Tuesday, he tried to clean up his criticism. “Look, the Affordable Health Care Act did a world of good, and the 50-something efforts to repeal it that the Republicans have staged were a terrible mistake,” Clinton said at a rally in Athens, Ohio. “We, for the first time in our history, at least are providing insurance to more than 90% of our people.”
“But there is a group of people — mostly small business owners and employees — who make just a little too much money to qualify for Medicaid expansion or for the tax incentives who can’t get affordable health insurance premiums in a lot of places. And the reason is they’re not in big pools,” Clinton said. “So they have no bargaining power.”
Republican presidential nominee Donald Trump said Tuesday he bet Clinton “went through hell last night” with his wife, then added: “Honestly, there have been many nights when he’s gone through hell with Hillary.” Bill Clinton, whose efforts with his wife to overhaul health care in the 1990s were stymied by a recalcitrant Congress and the insurance lobby, told the crowd the insurance model “doesn’t make sense” and “doesn’t work here.”
Touting his wife’s proposal to allow people without access to subsidies to buy into Medicare and Medicaid, he also acknowledged that market-based solutions would not solve the country’s problems with insurance costs and coverage.
“On the other hand, the current system works fine if you’re eligible for Medicaid, if you’re a lower-income working person; if you’re already on Medicare, or if you get enough subsidies on a modest income that you can afford your health care,” Clinton said. “But the people that are getting killed in this deal are small business people and individuals who make just a little too much to get any of these subsidies.”
Angel Urena, Clinton’s press secretary, defended the former president’s stance on Obamacare on Tuesday, saying he had consistently supported the legislation since it was enacted in 2010. “President Clinton spoke about the importance of the ACA and the good it has done to expand coverage for millions of Americans. And while he was slightly short-handed, it’s clear to everyone, including President Obama, that improvements are needed,” Urena said in a statement.
The White House said again Tuesday there were changes they would like to see made to the ACA. “President Obama has of course acknowledged that with cooperation from Democrats and Republicans in Congress, there are some things that could be done to further strengthen the law. That’s something that Sec. Clinton has vowed to pursue if she is elected President of the United States,” press secretary Josh Earnest said in a briefing. But he insisted Obamacare remains a top accomplishment of the president’s tenure.
“The Affordable Care Act continues to be a source of pride for people who work here in the administration in terms of that significant legislative accomplishment. That’s essentially our position,” Earnest said. “You’d have to talk to President Clinton about exactly what message he was trying to send.” When asked whether the former president went too far in his criticism against the ACA, Earnest responded he’s “not sure what argument (Clinton) was making.” And when asked if he wished Clinton hadn’t used “crazy” or “craziest” to describe Obamacare, Earnest said, “Of course.”
CNN’s Athena Jones, Kevin Liptak, Michelle Kosinski, Daniella Diaz and Allie Malloy contributed to this report.The Affordable Care Act, which you likely know better as Obamacare, should really come with a whiplash warning, because it’s been a roller coaster ride since it was fully implemented on Jan. 1, 2014. Some things went right, but many went wrong
On one hand, we recently found out from well-known pollster Gallup that the national rate of uninsured Americans is at a new eight-year low of 11%. In all fairness, Gallup and Healthways only began keeping track of the rate of uninsured Americans on a quarterly basis eight years ago, so there are no comparable records before Q1 2008. But since the individual mandate took effect, the rate of uninsured adults has dropped by 6.1%. Presumably, the fewer Americans that are uninsured, the more efficient the healthcare system should be, with medical costs spread over a greater number of people and Americans more likely to receive covered medical and preventive care when they need it.
But things haven’t always gone as planned. The Congressional Budget Office initially projected that Obamacare would have more than 20 million enrollees by 2016. As of the end of the 2016 calendar year enrollment period, there were “about 12.7 million” enrollees, per the Centers for Medicare and Medicaid Services. This massive shortfall in expected enrollees has left insurers, both national and regional, working with fewer enrolled patients, many of which have been shown to be costlier and sicker compared to consumers who are covered by employer-based health plans.
Making matters worse, many of the dynamics that insurers had been counting on (aside from higher enrollment totals) haven’t played out. For instance, in 2013 The Washington Post said that of the 7 million enrollees targeted in 2014, 2.7 million young adults would need to enroll to make Obamacare sustainable. Young adults are often healthier and less likely to seek medical care, meaning their premium payments can more than offset the higher costs of treating older and/or sicker members. Federally run Healthcare.gov did indeed enroll 2.7 million young adults in 2016, but there was a total of more than 9.6 million enrollees. In other words, far too few young people are enrolling, meaning the program is stuck with an older, sicker group of people.
The failure of the “risk corridor” has also been a disappointment. In simple terms, the risk corridor was a fund that profitable insurers on Obamacare’s exchanges were expected to pay into. This cash would then be distributed to struggling and/or new Obamacare plan insurers to help prevent excessive losses from mispriced premiums. In 2016, the risk corridor wound up being underfunded by more than $2 billion, leading more than half of Obamacare’s approved healthcare cooperatives to shut their doors.
But the biggest challenge may be yet to come
Does this action represent the beginning of the end for Obamacare? UnitedHealth Group (NYSE:UNH), the nation’s largest health insurer and a representative insurer in about half of all Obamacare exchanges, has confirmed via its spokesperson Tyler Mason that it is indeed pulling out of Georgia and Arkansas in 2017.
For those who may not recall, late last year UnitedHealth CEO Stephen Hemsley didn’t mince words during an investor conference when describing how bad Obamacare had been for his company. Though he took some blame for rushing into a perceived opportunity to gain new members, Hemsley attributed the exorbitant losses tied to Obamacare plans to two factors: the ease with which consumers can switch plans on a year-to-year basis and higher medical utilization costs for members. More recently, UnitedHealth has implied that it suffered nearly $1 billion in cumulative Obamacare-related losses between 2015 and 2016. This gloomy forecast led Hemsley and his team to the conclusion that pulling out of Obamacare might be a genuinely smart solution.
But here’s the crux: If the largest health insurer in the country pulls out of Obamacare because it can’t turn a profit, then what sort of sustainable future does the program really have?
At the time of Hemsley’s comments, and the company’s subsequent fourth-quarter conference call, no determination had been made as to whether or not UnitedHealth would actually make good on its threat to pull out of some (or all) markets. However, UnitedHealth’s exit from Georgia and Arkansas, two states where the company was losing significant sums in its Obamacare plans, could mark the beginning of a complete exit from Obamacare’s exchanges.
Some say that the transparency of side-by-side comparisons offered by Obamacare exchanges is enough to drive down premiums, but I strongly believe that competition among insurers puts greater pressure on premium prices. If UnitedHealth goes through with a complete exit, and other insurers follow — Humana, for example, has threatened to exit Obamacare exchanges as well — there won’t be much to halt premium inflation in less competitive states. If this happens, the first “A” of the ACA, affordability, could be thrown out the window.
What’s next? Maybe the question we should really be asking is whether Obamacare can survive much beyond the 2016 presidential election. With two candidates remaining, only Democratic front-runner Hillary Clinton would leave Obamacare in place and build around it. The remaining candidate would prefer to repeal Obamacare and start anew. Thus the upcoming election will be very telling in terms of what happens to healthcare in this country.
Should Clinton become the 45th president, then our eyes as consumers and investors should be turned to Obamacare’s long-term future. If insurers can’t figure out a way to turn a profit, then big premium hikes may be in order, which in turn could drive consumers back to the sidelines. Conversely, if insurers grow weary of waiting things out, they may simply leave Obamacare’s exchanges altogether. If that happens, a lack of competition could drive premiums up as well.
The only near-certainty at the moment is that Obamacare’s long-term future looks as shaky as ever.
But what are the alternatives and what do we do with the 21 million people who receive healthcare coverage and subsidies under Obamacare after you repeal or try to change the system? Where do they fit in? This is one of the biggest problems that we face if we don’t support some type of public option or Medicare for All. Also, who pays for this set of programs and we know what happens when the government runs a health care program….Just look at the Veterans Administration and how broken this health care delivery system has been and still is. I’m frustrated that with Veterans’ day approaching we still can’t find a way to take care of those that have given and given up so much for our Country and yet we ignore there needs for good health care and more.
The Republican Party has no concrete answers except to repeal Obamacare. Trump and the other Republican politicians have no idea how to create or modify the healthcare system to “make it work.”
Stop the rhetoric I say and let’s get together and come up with solutions and not complaints and accusations. What a sorry state that we are in!
And how do we vote for with two horribly flawed candidates? Hold your nose and pick who you figure will do the least damage to our wonderful Country and to our healthcare system and also remember that one real concern is the 3 Supreme Court Judges that will be replaced in the next 4 year term. Scary!!