Health Insurance Exchange Preview for 2017

The last few weeks have not been kind to the Healthcare Marketplace and Obamacare as more and more insurance carriers assess their position for 2017. One state after another has announced big increases in the marketplace: North Carolina Blue Cross 8.8%, Blue Cross of Texas 62%, Aetna 25%, and Optima Health of 13.48% in Virginia.
The number of insurance carriers who are either getting out of the business or are substantially changing their scope of coverage include Unitedhealthcare, Humana, Oscar in New York for certain plans, and Aetna in all states except four markets. Obamacare is on life support and will need a cash transfusion in order to continue beyond 2017. The current administration will continue to underscore the importance of subsidies and most folks won’t see a significant change in their premium for 2017.

I beg to differ. While it is true that 85% of the Healthcare Marketplace get some form of premium tax subsidy, Robert Laszweski, a health insurance policy expert estimates there are approximately 9.5 million folks who have an Obamacare policy with no subsidy. These folks will see a huge increase not only in their premiums for 2017, but may lose their plan, see their deductibles increase, and/or have to change carriers.

While we remain committed to helping our clients and referrals purchase quality insurance, the fundamentals of this market continue to unravel. Thus far, the risk pools are terrible. Texas Blue Cross has lost more than $1 billion dollars on the exchanges in the last two years, and we are not enrolling enough younger, healthier folks to offset the unusual high risk that each carrier has absorbed. Second, with the 2017 rate increases looming, Obamacare will continue a death spiral, with folks who don’t get a subsidy dropping out altogether and foregoing health insurance and roll the dice. This was not what we all signed up for. Third, the Republicans fearful of another bank bailout, have resisted approving the risk corridor payments which were essential to market stability and what the insurance carriers agreed to in 2010. Thus far 8 out of 10 insurance carriers have requested risk corridor assistance.

I encourage our current Exchange clients to review all of their options early in the upcoming Open Enrollment Period:

  • Do I have health insurance available through my job? Do I have health insurance available through a spouse?
  • If I’m a small business, should I consider purchasing a group policy?
  • How does my income affect my premium if I must stay in the Healthcare Marketplace?

And for those folks who must stay in the market with no subsidy, don’t shoot the messenger: We will help you as best we can, but your deductibles and out of pocket expense limits will have to change to save any premium.
The state of the Healthcare Marketplace reminds me of the 1980 Goldie Hawn movie, Private Benjamin. Judy Benjamin as she started basic training and had to clean the latrines in the women’s bathroom stated, “ This isn’t what I signed up for!”

Burman S. Clark

Burman S. Clark, RHU, CSA is the President of Muneris Benefits and a licensed insurance broker and consultant. His independent practice and focuses on employee benefits, individual life, disability, medical, and senior products. Burman has traveled extensively and provided guidance to large employer associations with regards to the Affordable Care Act.