The Affordable Care Act is at a crisis point in many states around the country. Premiums are rising and insurers are bailing. Here in Minnesota, legislative leaders are contemplating an early session to tackle challenges within MNsure, the Minnesota-based health insurance exchange.
Steve Parente, director of the Medical Industry Leadership Institute at the University of Minnesota, and Daniel Dawes, author of "150 Years of ObamaCare," talked about which issues are the most urgent to solve and if the problems with Obamacare reflect overall problems with the American health care system.
Listen to their entire conversation above. Below are quotes pulled from each guest.
What is causing premiums to increase?
"I think there are several things that have happened here, one of them is that the training wheels that were put on this program ... have been coming off for the 2017 year. So the risk corridors and reinsurance piece were in place for the first three years, they have come off. There were also grandfathered plans that were allowed to live a little longer and compete in the market with less regulatory components, those were set to expire this year as well. The combination of those two things ... were always going to make this year to be a cliff."
"Both of these are federal programs that were part of the law, in the original legislation that was passed, that more or less gave insurers essentially a cushion to get used to this market in a different way."
"[Risk corridors] is another provision in this law that has been obstructed in terms of being implemented. Only 12 percent of the funding under that provision has been given to the insurance companies for those who received losses or experienced losses in the health insurance exchanges."
"The other argument I've heard from folks is you look at the co-ops, that were also included as a public option, well look at how they've all failed. Well, another reason why we've seen failure there because of the six billion (dollars) that was appropriated to establish these co-ops to compete with the private insurers, only half of the money was given to them. So again, there you see some obstruction halting progress and actually increasing the costs."
Why are people who receive insurance through their employer also seeing a rise in premiums?
"From 2001 to 2010 right before the implementation of the ACA the employer's sponsored health coverage premiums, they doubled in that time frame ... So 40 percent of the cost of uninsured individuals were passed on to those who were insured. We tried to deal with that issue by increasing coverage."
"Another piece of this lowering cost argument, is the focus on innovative delivery and payment system reform. We don't have a good grasp on the total cost of care for patients across the care continuum, across care settings. We need to do a better job there, so change has been too slow, but in terms of the cost reducers in this law there are innovated delivery and payment system reforms focusing on value and not volume. And that will take time to help bend the cost curve."
The focus on preventative medicine was supposed to lower the cost of premiums. We're seeing the opposite, why?
"Because there are just some fundamental facts that are going on for a long time. Health care just goes up at a faster rate of inflation and has been for the last 60 years or so."
Why don't we see that in other countries?
"Because we don't' have an explicit budget on it. We don't have a central command and control budget aspect on health care and the NHS whether it's Scotland or the U.K. they do have a very explicit budget."
"Most people in the United States who are under the age of 65 get their insurance through their employer. There is nothing explicit about their employers being held to any particular cost increases year over year or for that matter if they go self-insured ... there's nothing that says (insurers) can't make a deductible at a certain level too high."