Tag: affordable care act
Health Insurance Premiums Are Set To Soar Just Before Midterm Elections

Health Insurance Premiums Are Set To Soar Just Before Midterm Elections

Anyone whose employer provides health coverage knows the drill. Each fall, they are offered a menu of potential health care plan choices for the following year.

It usually includes three options. First, there is a preferred provider plan, which pays most of the bills, has few limits on provider choice, and has the highest paycheck deduction. Second comes a mid-priced health maintenance organization plan, where provider networks are limited, prior authorization rules are strict, and co-pays and deductibles are moderate. Finally, there is a high-deductible plan, which has the smallest paycheck deduction, but can leave an individual or family with large, unaffordable bills when anyone covered by the plan requires hospitalization or expensive treatment.

The employer share for any one of those plans (the average family plan cost is nearing $30,000 a year) usually hovers around 75 percent of the total cost. Workers pick up the other 25 percent through a payroll deduction. In the decade after passage of the Affordable Care Act, the annual increase averaged around 6-7 percent or about the same rate as economic growth after inflation was taken into account.

But during the pandemic, health care cost began a rapid ascent to around 8-8.5 percent annually. Now, it has taken another upward lurch.

A new survey of health care actuaries by PwC (formerly known as Price Waterhouse Coopers) found private health insurers medical claims costs are rising at a nine percent clip this year and are expected to rise by a similar rate next year. Last year’s survey pegged this year’s expected cost increase at 8.5 percent.

“Health plans are projecting the highest medical cost trend in nearly two decades,” the consulting group said in its analysis. “Payers and employers face mounting pressure to act.”

This could prove a financial fiasco for people on employer-based plans, which cover about 160 million workers and their families. They will likely face co-premiums, co-pays and deductibles in their 2027 plans that are rising at nearly three times the rate of inflation.

And it could be a lot worse than that. As actuaries inside the insurance companies map out their costs, they will have to take into account the additional price increases levied by hospital systems due to rising utilization, AI-enabled billing tactics, and what’s likely to be a rapid rise in unpaid bills.

The sharp cutbacks in Medicaid contained in the One Big Ugly Bill signed by President Trump last year will hit in full force in 2027. Well over ten million impoverished Americans are expected to lose coverage due to their inability to leap over the bureaucratic hurdles erected to enforce the legislation’s work requirements.

Millions more are dropping coverage and falling into the ranks of the uninsured due to the Republicans’ refusal to extend the expanded subsidies in ACA plans enacted by Democrats during the Biden administration. Both cuts will trigger a huge increase in uncompensated care at the nation’s safety net hospitals that serve low- and moderate-income communities.

Like all hospitals, safety net hospitals must provide emergency treatment for anyone who lands on their doorstep thanks to the 1986 Emergency Medical Treatment and Labor Act, which was signed into law by President Ronald Reagan. Unlike their suburban counterparts, who face far fewer cuts because they serve mostly the privately insured, these safety nets have fewer resources and small or no endowments to fall back on.

The final rates will be determined by medical actuaries inside the insurance firms over the next few months. The rates for 2027 are usually unveiled in mid-October.

How will employees respond if they see their paycheck premiums rising at a near double-digit rate? Many more low-income workers will opt into high-deductibles plans, which will leave many with unpayable medical debt because they can’t afford the out-of-pocket expenses when someone in the family gets sick. More middle-class workers will opt into HMOs with their network limitations and prior authorization restrictions to save on their upfront costs.

The nation’s employees with employer-sponsored coverage will be making those decisions starting on November 1, the traditional date for open enrollment for the ensuing year. That’s two days before the midterm elections.

Merrill Goozner, the former editor of Modern Healthcare, writes about health care and politics at GoozNews.substack.com, where this column first appeared. Please consider subscribing to support his work.

Reprinted with permission from Gooz News


Trump and Hegseth

Iran War's Explosive Costs Could Finance Health Care Coverage For Millions

The Pentagon is asking the White House for an additional $200 billion to fight the president’s ill-conceived war in the Middle East.

While it’s unclear from the initial news reports whether this is a one-year or multi-year appropriation, the size of the request suggests this war is going to drag on a lot longer and involve far more manpower and firepower than President Trump and Secretary of Defense Pete Hegseth have let on. The now three-week-old war of choice has already left 13 soldiers dead and more than 140 wounded. It has already cost over $12 billion, according to reported estimates.

Let’s put that cost and this latest request in perspective. The $12 billion already spent is enough to have extended the Affordable Care Act subsidies for close to six months.

Instead, over two million or nine percent of people in ACA health insurance plans last year dropped them for this year (the first without the expanded subsidies) because they couldn’t afford the huge increase in their premiums, according to a new survey released yesterday by KFF, a health care think tank. That’s nearly a 10 percent increase in the ranks of the uninsured, which alone will bring the uninsured rate close to 10 percent overall.

And many more will drop coverage in the years ahead, given ACA marketplace purchasers’ concerns about their ability to pay the new, higher rates without subsidies.

The $200 billion the Pentagon is requesting is sufficient to extend the ACA subsidies for over five years. Where did I get that estimate? The failure to extend the subsidies helped pay for the $7.7 trillion in tax cuts for the wealthy and large corporations in last year’s One Big Ugly Bill (OBUB). It reduced health care spending by about $350 billion over ten years, an average of $35 billion a year. $200 billion ÷ $35 billion = 5.7 years.

The same math applies to the alleged Medicaid “savings” in the OBUB. Imposing work requirements (a lexicographic subterfuge for erecting bureaucratic barriers that will make it difficult for qualified Medicaid beneficiaries to re-certify their eligibility) will cut an estimated $326 billion from the program over the next decade, according to the Congressional Budget Office. Cuts to the federal share of aid to state Medicaid programs will “save” the federal government another $300 to $400 billion. The two together add up to at least $65 billion a year ripped from Medicaid.

To sum up: Cuts in ACA subsidies and Medicaid in the OBUB will average over $100 billion a year over the next decade. At the rate the Trump regime is spending on the war against Iran, the Pentagon will eat that up in two years.

This accounting doesn’t take into consideration the long-term costs of U.S. involvement in overseas quagmires of its own making. The Iraq War, which began in 2002, cost close to $1 trillion in direct military spending. The long-term cost of caring for the wounded, veterans’ special health care needs, and related spending has been estimated to cost an additional $2 to $3 trillion.

Those of us old enough to remember the Vietnam War will recall the “guns and butter” debate that accompanied President Lyndon B. Johnson’s slow descent into that quagmire. LBJ’s advisers assured him the U.S. could do both.

Wrong. Inflation began escalating by the late 1960s, throwing the country into a recession by December 1969. During the decade after regular combat began in 1965, prices rose by a total of 176 percent, twice the rate of inflation during the previous decade. The biggest increases were triggered by soaring oil prices due to an Arab oil embargo after the 1973 Middle East war.

President George W. Bush tried his hand at guns and butter in 2003 when, to bolster his reelection chances amid widening opposition to the Iraq War, he pushed through an unfunded Medicare drug benefit and pushed further deregulation of the financial sector. By the end of his term in office, the resulting housing bubble and sub-prime lending crisis led to the worst economic downturn since the Great Depression.

While looking up some of the specifics of that history, I stumbled across the origination of the phrase “guns and butter.” It wasn’t a 1960s coinage. It was popularized during the 1930s by German Reich Marshall Hermann Goering, who defended Germany’s huge military build-up by saying, "Guns will make us powerful. Butter will only make us fat."

It was Theodor Reik, a Jewish intellectual who fled Nazi Germany, who in 1965 took issue with the idea that history repeats itself. “This is perhaps not quite correct,” he said. “It merely rhymes.”

What does the Trump regime’s escalating military spending amid evisceration of social spending rhyme with?

Merrill Goozner, the former editor of Modern Healthcare, writes about health care and politics at GoozNews.substack.com, where this column first appeared. Please consider subscribing to support his work.

Reprinted with permission from Gooz News


As Insurance Costs Surge, GOP No Longer Pretends To Support Universal Coverage

As Insurance Costs Surge, GOP No Longer Pretends To Support Universal Coverage

The Trump administration’s wrecking ball has succeeded in shattering one of the core beliefs of centrist health care reformers, which states: Incremental reforms will eventually lead the U.S. to the promised land of health insurance for all—something most advanced industrial nations achieved more than 75 years ago.

Even many Republicans once signed onto the gradualist approach to achieving the goal of universal coverage. In the early 1970s, President Richard Nixon proposed covering everyone through insurance industry-managed plans. In the 1990s, a Republican-controlled Congress authorized universal coverage for children. Even President Trump in 2017 vowed to replace Obama’s Affordable Care Act with a new plan that would provide “insurance for everyone.” Ultimately, he failed to either release a plan or repeal Obamacare.

But now, for the first time in its history, the U.S. is making a sharp U-turn on the long road to health care for all. The GOP not even pretending that universal coverage is a desirable national goal. It is deliberately raising the ranks of the uninsured.

The One Big Ugly (not Beautiful) Bill signed by the president last July will drive an estimated 17 million people from the insurance rolls by 2034, according to KFF. More than two-thirds of those losses will come from cuts to Medicaid. Half those cuts, which establish bureaucratic roadblocks for obtaining coverage, won’t be reversed even if the Democrats succeed in forcing concessions from the majority party during the shutdown negotiations, which are still underway as of this writing.

Thanks to legislation Democrats passed during Joe Biden’s administration, the national uninsured rate fell last year to 8 percent, which is within hailing distance of universal coverage (generally considered to be five percent or less). Some states are already below that threshold, which might have occurred nationally had not ten Republican-run states, including populous Texas (still 16.4 percent uninsured) and Florida (10.9 percent), refused to expand Medicaid to cover the working poor. That overall rate is certain to rise next year and for the rest of this decade. If no changes are made, it will soar into the mid-teens, nearly to the levels seen before the Affordable Care Act passed in 2010.

Universal coverage doesn’t guarantee Americans will enjoy better health. Nor does it ensure health care will be affordable. However, it is inconceivable that either of those goals can be achieved without universal coverage, which is a necessary, though not sufficient, condition for addressing the long-term health care cost crisis affecting most American households.

Step by step

The incrementalist strategy emerged in the wake of President Harry Truman’s failed attempt after World War II to implement a government-run, universal health insurance plan, similar to those adopted by many European countries. Opposition from the American Medical Association, labor unions with their newly negotiated employer-based plans, and a burgeoning health insurance industry doomed the bill.

But calls for universal coverage never ceased. A decade-and-a-half later, with the White House and Congress in Democratic hands after Lyndon B. Johnson’s 1964 landslide, the government created Medicare and Medicaid for the old, disabled, and poor. In 1997, after the Bill Clinton administration’s significant push for universal coverage failed, a Republican-led Congress included a separate plan for uninsured children in the Balanced Budget Act.

Then, in 2010, with Barack Obama in the White House and the country reeling from the Great Recession, a Democratic Congress passed the Affordable Care Act. It created a subsidized individual market for those without employer coverage; expanded Medicaid to include individuals and families earning up to 137 percent of the poverty level; and began experimenting with a host of delivery system reforms to hold down costs.

However, cost-saving measures cannot be effective unless everyone is in the insurance pool. Uninsured individuals often postpone necessary but non-emergency care. When they become so sick that they must seek care, they show up in emergency rooms, where care is the most expensive, and where their outcomes are usually worse because they waited too long. For their troubles, they are often saddled with unpaid debts.

More uninsured hurts everyone

The dysfunction wrought by a growing pool of uninsured people affects everyone’s pocketbook. Providers and insurers use the uninsured’s unpaid bills as an excuse to pass along those expenses in the form of higher prices to the privately insured, who already pay 2 ½ times what Medicare recipients pay on average. This results in not just more expensive plans for employers (the median family plan cost a staggering $27,000 in 2025), but higher co-premiums, co-pays, and deductibles for their employees, whose share of the total cost of “employer-financed” care has hovered between 25 and 30 percent for decades. (I put scare quotes around “employer-financed” because employer contributions are a tax-deductible business expense that otherwise would go to workers as wages if it weren’t spent on benefits.)

Universal coverage doesn’t guarantee that health care will become more affordable for everyone. But it reduces the level of more expensive, uncompensated care in the system, which is necessary to lower prices for everyone, including private insurers and their employer customers. Universal coverage is a crucial prerequisite for achieving more affordable health care.

Yet now, under Trump and a supine Republican Congress, America is deliberately reducing the ranks of the insured. The process has already begun. Premiums for individual plans being sold on the exchanges for next year are soaring due to the expiration of enhanced subsidies, which will discourage many people from buying plans.

Though the bill’s new Medicaid work requirements were postponed until after the 2026 mid-term elections to hide their full effects from voters, states were given the green light to begin enforcing twice-annual recertification requirements. Many red states are already moving to do that, as well as cut their Medicaid spending in response to the cutbacks in federal support for the joint federal-state program. Millions of low-wage workers will start losing their Medicaid coverage next year, not because they aren’t working, but because they become frustrated by the paperwork requirements set up by hostile bureaucrats beholden to their Republican overlords.

Democrats on Capitol Hill are singularly focused on maintaining the enhanced subsidies and restoring the cuts in Medicaid financing. That means the work requirements and other bureaucratic roadblocks will remain because they can’t be addressed in a reconciliation bill. No matter how the shutdown is resolved, a sharp decline in both coverage and access is inevitable.

That will financially harm almost everyone covered by employer-sponsored plans. This year, those rates soared at twice the inflation rate on average, according to the annual KFF employer survey of just under 1,300 firms. Mercer, a leading benefits consulting firm, says rates will rise by a similar level next year. Plan structures will undoubtedly include higher co-payments, higher deductibles, and higher co-premiums for workers and their families.

No matter how the government shutdown is resolved, the health care affordability crisis, exacerbated by the historic GOP U-turn on universal coverage, will remain a salient issue during next year’s House and Senate campaigns. The only question is whether Democrats will be able to take advantage by offering a program that addresses voters’ number one concern when it comes to health care.

This story first appeared on the Washington Monthly website.

Merrill Goozner, the former editor of Modern Healthcare, writes about health care and politics at GoozNews.substack.com, where this column first appeared. Please consider subscribing to support his work.

Reprinted with permission from Gooz News


​Johnson Retreads His Unpopular, Previously Rejected 'Ideas' For Health Care Reform

​Johnson Retreads His Unpopular, Previously Rejected 'Ideas' For Health Care Reform

House Speaker Mike Johnson on Monday suggested that the "ideas" Republicans are kicking around for how to make health insurance more affordable is basically just the Obamacare-repeal plan that the GOP tried and failed to pass in 2017, during Donald Trump’s first term.

“When I say that the Republicans have been working on a fix for health care, we’ve been doing this for years,” Johnson said Monday at a news conference on Capitol Hill after he was asked how Republicans were planning on addressing the expiration of enhanced Affordable Care Act subsidies that, if not extended, will soon cause massive premium increases for millions of Americans.Johnson specifically pointed to the health care proposal he released when he was chair of the Republican Study Committee—a caucus of right-wing House Republicans.

"These ideas have been on paper for a long time," Johnson said. “There’s volumes of this stuff. Volumes of it.”

Of course, the reason they have been on paper but never passed is because the ideas in the RSC health care proposal are overwhelmingly unpopular.

The Center on Budget and Policy Priorities, a left-leaning think tank, reviewed a newer version of that RSC health care proposal found in the committee’s proposed budget. That review found the plan would weaken protections for preexisting conditions, cut the tax subsidies millions of Americans receive to make their ACA premiums lower, and "would slash $4.5 trillion in federal investment in Medicaid, Children’s Health Insurance Program (CHIP), and marketplace coverage"—all moves that would likely cause millions to lose their insurance.

“These proposals would create an environment where people with health conditions would pay higher premiums and out-of-pocket costs for less substantial coverage than is currently available,” the CBPP report says. “Given the increase in costs, more people would enroll in subpar plans that leave them exposed to high costs if they get sick.”

That sounds a whole lot like the Obamacare repeal that Republicans attempted to pass in 2017. That bill failed spectacularly amid public outcry because it would have kicked millions off their insurance and weakened protections to cover preexisting conditions.

In fact, the repeal effort was such an unpopular boondoggle that it helped to sink the GOP in the 2018 midterm elections.

If this is the plan Republicans will try to pass again, it’ll likely be an equally unpopular mess for the GOP.

Polling shows that the ACA is popular, with 64 percent of Americans viewing it favorably, according to a KFF tracking poll.

Shop our Store

Headlines

Editor's Blog

Corona Virus

Trending

World