Editorial: Obamacare begs for Congressional review

The Detroit News

The Affordable Care Act — commonly called Obamacare — isn’t working as it was supposed to. Insurance premiums are set to skyrocket in 2017, following increases the past several years. And this week Aetna, one of the nation’s largest insurance companies, announced it would cut back by 70 percent on its participation in the health care law’s exchanges.

Aetna follows the lead of United HealthCare, which pulled out in April, and Humana, which recently cut back its offerings nationwide to just a few counties.

President Barack Obama’s signature health care law was built on a dream. But market realities still exist, and taxpayers and patients throughout the country will continue to pay the price for the president and Congress ignoring those realities.

Blue Cross Blue Shield of Michigan has requested to boost its premium rates by an average of 18.7 percent for individual plans. Another major provider in the state, Priority Health, wants to raise rates by almost 14 percent, and Humana has requested a 39.2 percent increase.

Michigan residents will fare better than those in other states where rate increases could be much higher.

Obamacare advocates argue that only those who fall outside the bracket for subsidies — which is 400 percent of the poverty level — will see such huge increases.

That’s about half of Americans under the age of 65 without employer-sponsored insurance, according to the Wall Street Journal. Those who make between 400 and 500 percent of the poverty level still spend 18 percent of after-tax income on Obamacare plans, according to the Urban Institute.

Aetna says it lost $430 million on Obamacare plans in the first half of the year. United had projected $650 million in losses this year.

Rates are increasing because insurance companies are bleeding money on the exchanges. Those enrolling in the exchanges continue to be sicker and older than the federal government originally projected. Enrollees tend to enter the pool only before incurring large medical expenses, and the system even offers special enrollment periods to target these types of customers.

Some providers are also pushing patients who need special services out of Medicaid and into Obamacare. They receive higher reimbursements on the exchanges and pocket the difference.

Insurers are also citing the increasing costs of prescription drugs as a cause for rate increases.

Along with huge jumps in rates, consumers will see less competition and fewer options for health care coverage. The Kaiser Family Foundation estimates 664 counties will offer just one marketplace insurer next year, up from 225 in 2016. This is particularly a problem for patients in more rural areas, where options were already limited.

Democratic presidential candidate Hillary Clinton’s pledge to build on Obamacare’s success should worry voters who have had to deal with the nightmare of increasing insurance costs with worse coverage.

What’s needed is a reworking of the law to address its flaws.

The Obama administration says these increases and hiccups were predictable, but it also blames insurers for originally pricing premiums too low. The administration is also ending a program that helped pay some of insurers’ largest claims.

But the White House can’t continue to defend and celebrate a health care program that is so clearly failing. Obamacare is begging for serious review from Congress before the damage is irreversible.