Soaring health premiums? It’s easy to fix health insurance premiums, just shift costs somewhere else … like to all taxpayers.
The Affordable Care Act has several stabilization subsidies built into the law … which haven’t worked apparently so let’s go in a new direction; simply have the state pay for the most expensive claims thereby making it appear something positive has occurred. In reality it’s nothing but a band-aid, a temporary fix similar to high risk pools. In both cases the underlying problems of health care costs, spending and adverse selection remain.
MINNEAPOLIS — Last fall, as consumers in Minnesota were facing health insurance rate increases of 50 percent or more, Gov. Mark Dayton, a Democrat, said the Affordable Care Act was “no longer affordable to increasing numbers of people.” The state’s top insurance regulator said the Minnesota market was “on the verge of collapse.” The outlook now is much better. Rate increases requested for 2018 are relatively modest, thanks in part to a new program under which the state will help pay the largest claims.
The program, known as reinsurance, and the efforts that led to its creation hold lessons for other states where rates are rising rapidly, and for Congress, where lawmakers are considering the introduction of a similar program. “The individual insurance market is stabilizing under the program here,” said Allison L. O’Toole, the chief executive of Minnesota’s state-run insurance marketplace. “Health plans are very happy about it.” State officials and insurers say that, as a result of the program, premiums next year will be about 20 percent lower than they would otherwise have been.
The program — for which Minnesota has budgeted about $270 million in each of the next two years — potentially benefits all of the 160,000 people buying insurance on their own, not just those with large claims. But the program will be invisible to consumers. They will not have to file additional paperwork or do anything different from what they would ordinarily do.