Aetna’s CEO Mark Bertolini highlights how the current system increases costs for both insurers and consumers

At the moment, probably no issue is more politicized than that of the Affordable Care Act (ACA), often called Obamacare. Because it controls the design of health insurance coverage, it also influences the way health plans pay hospitals, physicians, clinical laboratories, and anatomic pathology groups.

However, understanding the truth about what is working and what is not with the Affordable Care Act is a complex undertaking. That is because both the advocates and critics of this law are engaged in highly-partisan rhetoric, despite the fact that most have no intimate knowledge of how healthcare works in the United States.

One voice that attracted national news attention recently was Mark Bertolini, CEO of Aetna, Inc., one of the nation’s largest health insurance corporations. In a public presentation, he offered his assessment of this legislation, declaring that the Affordable Care Act was in a “death spiral.”

Death Spiral

Bertolini made these remarks at the Wall Street Journal’s 2017 Future of Healthcare event. He showed how risk pool concerns and the lack of healthy people joining Marketplace health plans are sending Obamacare into a “death spiral.”

“That logic shows just how much the risk pool is deteriorating in the ACA and how poorly structured the funding mechanism and premium model is,” said Bertolini, according to a Washington Post article. “I think you will see a lot more withdrawals this year of plans,” he predicted.

During a presentation of the American Healthcare Act, Wisconsin Republican and House Speaker Paul Ryan (above), drew on Mark Bertolini’s “death spiral” comment for his slide presentation. (Photo copyright: Mic Network.)

During a presentation of the American Healthcare Act, Wisconsin Republican and House Speaker Paul Ryan (above), drew on Mark Bertolini’s “death spiral” comment for his slide presentation. (Photo copyright: Mic Network.)

The increasing premiums and decreased participation of insurance providers in the Marketplace have concerned other health industry experts as well. In a CNBC interview in late 2016, Bob Laszewski, President of Health Policy and Strategy Associates, LLC in Alexandria, Va., said, “What the politicians need to do is to understand they have got about a year to fix this. If we don’t get some very significant fixes to Obamacare, the math is simple. These plans can’t continue the way [they are] going. And that undermines the coverage that [these] people have gotten.”

Two Sides of the Obamacare Coin

In 2017, Kaiser Family Foundation (KFF) expects premiums to increase faster than in prior years. The second-lowest cost Silver Plan will increase by 23.4% on average across all 50 states and the District of Columbia.

The data also shows that consumer options on the Marketplace Exchanges are dwindling. In 2016, 85% of exchange enrollees have three or more insurers from which to choose. In 2017, that number dropped to 57%. According to KFF data, enrollees in West Virginia and New Hampshire have just one insurer offering plans on the Marketplace in 2017.

For many consumer shopping for health for insurance, the subsidies create two very different experiences. A recent article in The Denver Post highlighted this issue. Their story features two men who both own their own businesses. While one struggles to pay premiums, the other considers the ACA essential to healthcare availability.

Speaking with The Denver Post on the issue, Caroline Pearson, Senior VP of Policy and Strategy at Avalere Health said, “Obamacare helped a lot of lower-income people with high health needs who previously couldn’t afford insurance. It overlooked the fact that there are a lot of people who are relatively healthy and who didn’t want the increased benefits. More sick people drove up premiums, which is resulting in some people feeling like they are worse off.”

Kaiser Family Foundation data shows enrollees who qualify for subsidies won’t feel the impact of these increases in the majority of states. Yet, as more enrollees choose alternative coverage options, or opt to pay the fines, the risk pool conditions could continue to decline. This leaves insurers again raising rates to stay solvent.

Deductibles Increasing Faster than Wages

Premiums aren’t the only areas consumers are seeing increases. Deductibles for medical laboratory services, prescriptions, and other out-of-pocket expenses are rising as well. Kaiser Family Foundation’s 2016 Employer Health Benefits Annual Survey found that while premiums were up 3% between 2015 and 2016, deductibles rose 12% across the same group. Compounding the issue of rising costs, the same survey shows worker wages increased only 2.5% across respondents.

In a December 2016 Kaiser Family Foundation Health Tracking Poll:

• 32% of respondents said they were “very worried” about income not keeping up with prices;

• One-quarter of respondents were “very worried” about not being able to afford healthcare services; and

• Among those who said they had problems paying medical bills in the past 12 months, 61% said they used up all or most of their savings.

If fewer people can afford care, fewer will pay premiums. This will further skew the risk pools and place strain on insurance providers. This leads to more premium increases, amplifying the issue further still.

Already, the Trump administration is working to find solutions to these issues. Providing healthcare for more than 325-million people in a way that works for everyone is complex. Meanwhile, politicians, insurance providers, and healthcare professionals must continue to improve quality of care while keeping costs sustainable for both business and consumers in the coming years.

Pathologists and clinical laboratory professionals can contribute by being open to the other ideas put forth by Bertolini at the Aetna event. He called for a transformation of our healthcare system into one that discovers and addresses disease before it becomes life threatening. He pointed to the new hepatitis C drug therapies, which have been successful in curing patients of the disease in test studies, but which are extremely expensive. Better to pay a high cost for successful treatment then wait for a liver transplant, he said, according to the Washington Post article.

—Jon Stone

Related Information:

Aetna Chief Executive Says Obamacare Is in a ‘Death Spiral’

USA Today: The Cascade of 2017 Obamacare Premium Hikes Has Arrived

Fail: Expert Says Obamacare Might Be on the Brink of Total Collapse

8 States Where Obamacare Rates Are Rising by at Least 30 Percent

2017 Premium Changes and Insurer Participation in the Affordable Care Act’s Health Insurance Marketplaces

A Quick Guide to Rising Obamacare Rates

Overwhelming Evidence That Obamacare Caused Premiums to Increase Substantially

Rising Premiums Illustrate the Gap Between the Subsidized and the Unsubsidized under Obamacare

The Future Of: Health Care

Data Note: Americans’ Challenges with Health Care Costs

The Missing Debate over Rising Health-care Deductibles

2016 Employer Health Benefits Survey

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