Is Obamacare in the midst of a simple, predictable one-year correction?
Or is the program beginning a “death spiral” that will destroy it and bankrupt the U.S. healthcare system along the way?
There is a wide range of opinions out there as the Affordable Care Act (ACA) prepares for its fourth year of enrolling Americans into health insurance programs.
The enrollment period begins Tuesday and continues until Jan. 31. Consumers who want their new healthcare plans to begin on Jan. 1 need to enroll by Dec. 15.
It’s uncertain what exactly will happen with Obamacare in 2017, but as this session’s window opens there are some things that seem certain.
There will be more enrollees in ACA plans this year than last year, although how many more is anybody’s guess.
Premiums for insurance plans purchased in the ACA marketplaces will definitely go up, some by quite a bit.
There will be fewer options for people in most ACA exchanges.
And consumers, whether on ACA plans or their employer’s health insurance, will most likely shell out higher deductibles and copayments.
Earlier this month, President Obama acknowledged his signature healthcare plan is having “growing pains,” but he said the overall system is sound and just needs some fine-tuning.
He compared it to mobile phones that are upgraded every year.
“When one of these companies comes out with a new smartphone and it had a few bugs, what do they do? They fix it,” the president said in an Oct. 20 speech in Florida. “You don’t go back to using a rotary phone. You don’t say, well, we’re repealing smartphones.”
Some experts interviewed by Healthline agree with the president that Obamacare is just in a course correction.
Others aren’t so sure.
“We are wasting so much money while building a bureaucracy,” said Twila Brase, R.N., president of the Citizens’ Council for Health Freedom.
Brase’s group has posted a five-point call to action for supporters who want to help bring down the ACA marketplace.
As the 2017 enrollment period opens, Healthline takes a close look at some of the important aspects of the Obamacare system.
White House officials are predicting 13.8 million Americans will sign up for ACA marketplace plans during the fall/winter enrollment period.
If true, that would be 1.1 million more than the 12.7 million who signed up last year.
Administration officials expect the new enrollees to come from the 10.7 million uninsured and from the 5.1 million people eligible for the marketplace who currently purchase off-marketplace coverage.
They also expect the monthly average of ACA participants paying premiums to be 11.4 million. That would almost 1 million more than the 10.5 million average this year.
During her Oct. 19 announcement, Health and Human Services Secretary, Sylvia M. Burwell, said the ACA marketplace has provided greater access to healthcare for Americans while keeping costs in check and building a “smarter healthcare system.”
She noted that more than 20 million people have found medical coverage under ACA plans since the law went into effect.
She added that in September the percentage of people uninsured in the United States fell to 8.6 percent, the lowest in history.
Nonetheless, the 9 percent growth in 2017 enrollment is an ambitious goal.
Dr. Georges Benjamin, the executive director of the American Public Health Association, thinks the White House will achieve it.
He said more people know about the program now, and some have purchased insurance under it in the past.
Advocacy groups have also had time to hone their message to encourage sign-ups.
“Like any new program, I think it will grow over time,” Benjamin told Healthline.
Kurt Mosley, the vice president of strategic alliances for Merritt Hawkins health consultants, doesn’t think the number of enrollees will increase significantly.
In fact, he told Healthline the number of ACA participants could be somewhat flat.
He believes the higher premiums and the lack of penalty will keep healthier younger people from signing up.
Brase says enrollment will probably exceed 13 million this coming year, but she notes estimates by the Congressional Budget Office before the ACA law took effect predicted there would be 24 million enrollees by now.
“Enrollment is way low,” she said.
Costs and options
Everyone is in agreement that insurance premiums and other costs are going to go up next year.
The big questions are by how much and if expenses are lower than they would have been otherwise.
On Oct. 24, the White House announced that insurance premiums on the midlevel benchmark plans sold across 39 states in the ACA marketplace will go up by an average of 25 percent.
That’s triple the increase those benchmark plans were hit with this past year.
“That’s a huge increase,” said Mosley.
Larry Levitt, who tracks healthcare law for the Kaiser Family Foundation, told U.S. News and World Report the leap in premiums could cause a “tumultuous open enrollment period.”
In addition, Sen. Orrin Hatch (R-Utah) told the publication the rate increases aren’t surprising, but “do little to dispel the notion that we are seeing the law implode at the expense of middle-class families.”
However, White House officials note the 25 percent premium hike is before government financial assistance is factored in.
About 85 percent of ACA enrollees are eligible for some kind of financial help.
White House officials estimate that 77 percent of ACA participants will have monthly premiums that cost them less than $100 a month.
“It won’t be much of a blip for them,” noted Benjamin.
Of course, that does mean the cost to U.S. taxpayers will be rising.
One of the main reasons for the jump in premiums is the lack of competition.
The White House estimates the number of providers on its ACA website will drop from 232 this year to 167 next year. That includes duplicates where companies offer services in more than one marketplace.
Part of the reason for the decrease is some big players such as UnitedHealthcare have scaled back their participation.
In some regions, there will be only one provider available. That insurer will have more than one plan for consumers to choose from.
However, White House officials say 79 percent of ACA enrollees will have more than one provider available. Consumers, they say, will have an average of 30 healthcare plans to consider.
They add the marketplace insurance rates are still “well below” the original estimates from the Congressional Budget Office.
Benjamin said this year’s increase is part of an “insurance cycle.” He explained that when providers first enter a market, they keep rates low to entice customers. Then, after a few years, they hike the rates as consumers settle in.
Therefore, it’s important that consumers do their homework.
“People really need to shop around,” he said.
Brase, however, sees the insurance premiums as part of a “death spiral” by Obamacare. She said the higher premiums will cause fewer people to sign up and that, in turn, will cause premiums to go up again.
Mosley said the risk pool in the ACA markets isn’t working right now. Too few healthy, younger people are signing up, so there is no corresponding counterbalance to the wave of previously uninsured people with serious healthcare needs who are enrolling.
Mosley has heard the predictions of 2017 being a one-year correction. He’s not sure he believes it but hopes the ACA supporters are correct.
“I hope they know more than I do,” he said.
Taxes and Medicaid
One reason for the lack of younger enrollees may be the tax penalty for not signing up.
The penalty for being uninsured is rising next year to about $700 a person. The fee is imposed on an individual’s tax return.
But the penalty does actually seem to be having some effect. According to the New York Times, more than 8 million tax returns were hit with the penalty in 2014. In 2015, that number fell to 5.6 million. The average assessment that year was $442.
However, experts told the New York Times the penalty still isn’t enough to deter many younger, healthy people. It’s significantly less than they would pay in insurance premiums and these younger people are willing to gamble that they won’t incur any large medical bills during the coming year.
However, Benjamin expects things to get a little tougher.
He believes healthcare providers are going to be “much less tolerant” with people who don’t have insurance. He said medical providers will be less likely to write off costs and will be more aggressive in trying to collect outstanding debts.
“The ACA has greatly changed the expectations,” he said.
Another change could be the Medicaid expansion program.
Currently, 19 states don’t participate in the ACA provision that allows for an expansion of Medicaid to cover more lower income households.
Mosley thinks more states will join the program next year because it’s becoming too expensive to run at the state level.
He said a lot will depend on how things work out in Louisiana, which switched gears and joined the Medicaid expansion this past summer.
Despite the attention given to Obamacare, the vast majority of Americans receive health insurance through their employers.
It’s estimated 157 million Americans have employer-based health plans, compared to the 13 million or so under the ACA umbrella.
According to a report released this month by The Commonwealth Fund, insurance premium hikes for employees have been relatively modest since the ACA was enacted.
However, the report notes, employee salaries have not kept pace with even these moderate increases.
White House officials estimate that employer health coverage costs are $3,600 a year less per individual than if the growth in expenses before the ACA took effect had continued unabated.
Nonetheless, Dr. Michael Munger, the president of the American Academy of Family Physicians, said doctors have noticed the effects of the healthcare market.
He said many patients have higher deductibles and sometimes skip treatments or delay preventative care because of out-of-pocket costs.
Munger said at his family practice in Kansas he tries to educate his patients about what kind of medical care they might require in the coming year given their health status.
“I try to help them understand what their healthcare needs are going to be,” he said.
A new president
Most of these predictions on Obamacare in 2017 are based on the assumption that Democratic nominee Hillary Clinton will win the presidency next week and take office in January.
If Republican nominee Donald Trump pulls off an upset and is elected president, things could change dramatically and quickly.
Trump has repeatedly promised to repeal Obamacare and replace it with something he says would be better and more affordable.
That action, if approved by Congress, would probably take more than a year to take effect, so the estimates for 2017 would remain in place.
The biggest immediate change might be that the 19 states currently without the Medicaid expansion might decide to stay where they are while the ACA is dismantled.
Clinton, on the other hand, is promising to keep the structure of the ACA intact and instead make incremental changes.
Among other things, she says she wants to bring down out-of-pocket costs and reduce the price of prescription drugs, which a poll by the Kaiser Family Foundation concludes is a greater concern for Americans than even insurance premiums.
Brase thinks Clinton will probably try to introduce a public option system, which would place a government-run program alongside the private insurers in the ACA marketplace.
“Clinton will try to expand, embed, and engrain more deeply the Affordable Care Act,” she said.
Brase doesn’t think tweaking the ACA will work. She sees it as a deeply flawed system that needs to be replaced.
“Healthcare doesn’t have to be as expensive as it is,” she said.
Brase predicts “everything will get worse” under the ACA whether or not more people sign up.
“Either way, they will end up poorer at the end of the day,” she said.
Brase would like to see some states take over at least part of the ACA system and then see if the White House would come after them.
“There’s things the states can do to thumb their noses at the federal government and dare them to do something,” she said.
As for predictions, will there be chaos if Obamacare is dismantled?
“We are in the midst of chaos at the moment,” Brase said. “It’s never a good thing for things to go in the wrong direction.”
The other experts interviewed by Healthline see some merit in making adjustments to Obamacare.
Benjamin would like to see the next president “work on the rate structure” as well as increase government subsidies.
He also supports looking into the public option plan and possibly allowing people as young as 55 to sign up for Medicare, a notion Clinton has voiced some support for.
Munger would like a closer look at the marketplaces and the pricing. He also hopes there can be expanded coverage as well as more states adopting the Medicaid expansion.
“I would certainly like to see that,” he said.
Mosley would like to see cross-state competition introduced in an effort to lower prices as well as a simplification of the ACA system.
“People will buy things they understand,” he noted.
Mosley said there also may be a necessity to look again at the preexisting conditions portion of the law and perhaps limit some of those provisions.
All in all, he doesn’t see Obamacare going away.
He said there are too many people participating and enough supporters of the law to keep it going.
“I think there are too many things in place right now,” he said.