(Guest column) — Right-wing opponents of the Affordable Care Act want you to think the demise of health insurance companies like WINhealth in Wyoming are happening because the failure of “Obamacare” was inevitable.
Don’t fall for it. ACA supporters should have seen it coming, but the same people blaming President Barack Obama’s landmark federal health care reform are the same ones who have worked incessantly to rig the system so it won’t work.
Congressional Republicans are still determined to land a punch that will knock out a system that’s already helped put about 9 million more Americans on health insurance rolls. Their latest attempt won’t accomplish that, but it landed hard enough to leave the ACA reeling for awhile. It was definitely a low blow, but one that Obamacare backers could have blocked if they had been paying more attention.
Earlier, WINhealth — which has 4,600 other Wyoming customers who don’t use the ACA marketplace — said it was leaving our state mainly because it will not receive about $4.3 million in federal funds the company was counting on to stay in business.
WINhealth isn’t to blame for its closure, and while it makes a convenient scapegoat, neither is Obamacare. The law was designed to provide an incentive for companies to join the Healthcare.gov marketplace, because it was supposed to reduce the inherent risks they accepted to offer ACA policies.
The negative effects will be felt across the country, but the GOP’s handiwork will have an especially large impact in Wyoming, which now has only a single health insurance provider — Blue Cross Blue Shield — to offer subsidized ACA plans in the federal marketplace.
So much for the competition the ACA was supposed to generate to give Wyomingites a range of affordable health insurance options from several companies. The Wyoming Legislature’s Republican leadership decided not to even try to create a state marketplace to better serve its citizens with lower costs. It certainly wasn’t because they have so much faith in the federal government to take care of Wyoming; like their congressional counterparts, they just wanted to prevent Obama from scoring a victory.
State Insurance Commissioner Tom Glause says he will try to recruit another company to join the marketplace in Wyoming, but how successful do you suppose that effort will be? What health insurance provider is going to want to offer ACA plans here after what happened to WINhealth?
Last week Glause announced the state is taking over managing the 8,400 WINhealth ACA plans sold to residents until the end of the year, which will at least protect plan holders for the next two months.
The “risk corridors” program works like this: Insurers pay into a pool if their profits for the year are 3 percent or more above claims costs. Insurers who lost 3 percent or more would receive payments from the fund. The federal government would pay any shortfall in case the more successful companies didn’t put enough into the pot to cover the ones who lost money.
A similar program that’s still working was created under George W. Bush’s administration to reduce risks for Medicare Part D providers. No Republicans objected to that move, but for the ACA they called it a backdoor bailout of insurance companies.
It was never a bailout. When the ACA was implemented, no one knew which insurance companies would have healthier customers and lower costs and which ones would have an abundance of sick clients who filed higher claims than their insurer could cover. All of the companies who agreed to offer ACA plans were at risk of being in the latter situation. Risk corridors would level the playing field.
The Congressional Budget Office initially anticipated an equal amount of payments and reimbursements under the risk corridors program. It would be revenue-neutral, so the federal government wouldn’t have to kick in any money.
The GOP still contended the system would increase the deficit. Democrats offered a revised report that estimated the program would actually save the feds $8 billion a year.
Republicans tried to make risk corridors disappear as part of a proposed agreement to raise the debt ceiling, but it was such an unpopular move among insurers that the threat was dropped.
But a key mistake by health reform supporters put the new system in jeopardy. The law included a provision that any money that needed to be spent to balance risk corridors would be required to receive congressional approval. That appeared to be no problem when Democrats controlled both the House and Senate in 2010, but once the GOP took over both chambers, it became a huge deal.
Republicans insisted the program had to pay for itself, with no federal help. After they predicted the program would actually reduce the deficit, Democrats couldn’t reasonably argue against a demand that it be revenue-neutral.
In its first year of operation, many more companies in the marketplace lost money than anticipated. Nationally, these insurers sought nearly $2.9 billion from the risk corridors fund, which had only collected $362 million.
Without congressional approval to prop up the fund, the federal government’s only option was to pay just 12.6 percent of the claims insurers submitted. WINhealth, which had expected a $5 million payment to help keep its doors open, was notified Oct. 1 that it would only receive $638,000.
The feds plan to pay the remainder of insurers’ claims with funds generated by more successful companies in 2015 and 2016. But that doesn’t help companies like WINhealth a bit, because even if the fund does grow, they can’t afford to stay in the marketplace. In recent weeks health insurance companies in Tennessee, Kentucky, Colorado, Oregon, New York, Iowa, Nebraska and Nevada announced the lack of anticipated risk corridors payments is forcing them to close, and more are expected to join them as the situation deteriorates.
Conservative Republican opponents are crowing that the initial results of the ACA marketplaces show they were right all along that Obamacare would fail. But the resistance of GOP governors and lawmakers to set up state marketplaces and the party’s resolute demand to not put any federal dollars into the risk corridors program have hurt the effort to insure more Americans who can’t buy policies without subsidies or tax credits.
In Wyoming, Blue Cross Blue Shield will have a monopoly in selling ACA plans without any competition for the foreseeable future. There are three other companies that offer private insurance in the state, but their policies are only affordable to the same people who could always buy them. Poor people are left with one option that will likely require more federal subsidization as companies set their policy rates for 2016.
The GOP will balk at that, which could easily put the ACA on a course to collapse. If low-income people who finally obtained health insurance are forced to give it up, Republicans will have “succeeded” in reaching their goal of making this vulnerable population fend for themselves when it comes to health care.
Obamacare foes haven’t offered any healthcare solutions of their own, or even attempted to help fix any of the law’s flaws. Their mission remains the same: Crush the ACA by doing everything in their power to make it fail.
Based on their miserable health care record, Republicans will argue next year that they deserve not only to lead both chambers of Congress, but the White House to boot. The strategy makes absolutely no sense and hurts the people they claim to represent, but it has led to election wins in the past, so they’ll stick with it.
Democrats will only win if they somehow manage to gain control of a marketing war their opponents have been on top of since Obama took office in 2009. Here’s an example of how well the GOP has spread its message: A recent poll in Iowa, always the first state to pick its preference in the presidential race, showed that more than 80 percent of Republican voters in the state believe Obamacare is the worst thing to happen in America since slavery.
The demonization of the ACA will continue as long as Republicans believe it will propel them to a White House victory. Obama’s health reform law has been gaining in national popularity since people began signing up for it two years ago, but the GOP effort to make risk corridors unworkable and purposely put insurers out of business has knocked it back several pegs.
It’s shameful, but it’s impossible to shame politicians who want to intentionally wreck a health care system that’s finally ended the insurance industry’s ability to either exclude people because of their pre-existing medical conditions, or throw them off their policies once they get sick.
Congressional Republicans can’t stand progress, especially if their record shows the only thing they’ve done is try to block it.
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