Politico's new analysis examines the pitfalls of the Affordable Care Act using North Carolina as a case study. The state has seen both enormous successes and failures of the law in the past few years. It now has significantly lower uninsured rates (by 30%), with 600,000 people signing up for ACA exchange insurance in 2016. However, some insurance companies are sustaining enormous losses to accomplish that.
Politico cites several instances of insurance loss. UnitedHealth Group is exiting the North Carolina ACA market altogether next year. BlueCross BlueShield reported losses of $400 million in the state, and Aetna wants to hike its rates by upwards of 25% to compensate for its own losses. A 2015 Politico review found that 40% of 100 surveyed insurers around the country spent more on healthcare than they took in. In 2014, that rate was 70% according to a more thorough nationwide analysis by McKinsey.
Politico also examines what is working in states where the healthcare market is creating profits or breaking even for insurance companies. Possible factors include the health of each state's population and also how strong the competition is to begin with between insurers that can help to make their prices viable.
Finally, Politico suggests several possible solutions to a dwindling healthcare market:
- Get more insurance companies in the exchanges. The more insurers are willing to sustain risks or losses in the short term, the healthier the market will be in the long term. Many companies are doing this already, in part because they receive government payments that far outweigh their losses, albeit for participation in a separate government program set (Medicare and Medicaid).
- Although this is not directly mentioned, because generally poor population health is a major pitfall, it follows that low-cost large-scale preventative health efforts might be of use.
- More healthy young people need to sign up for ACA exchanges. As indicated by Politico, this might be achieved through government incentives, removing the 22-to-26 year old gap of those on their parents' insurance, increasing the penalty for being uninsured, or making it harder to only get care after an accident or illness develops.
- Finally, the federal government could put in place its originally planned reimbursements for insurance companies' net losses, a plan that does not have support in Congress.