While it’s early yet for the data, the debate has already begun about the impact of the Affordable Care Act on insurance rates. And if some of the early data is positive for consumers, particularly in the giant California market, it’s not so good where we live, in Louisiana.
The question is whether the ACA, aka “Obamacare,” is cause for the high rate increases in some states and for low rate increases compared with past years in other states.
Sounds contradictory, but the reality is that America is not one national insurance market but has many in different states. And another reality is that many states have the power to review or even reject excessive rate increases, but Louisiana does not.
That is not the fault of Insurance Commissioner Jim Donelon, a Republican, who has pressed for better consumer protection — a hard sell in the industry-dominated Legislature.
But a third reality is that the impact of Obamacare is still settling in across the nation, in different ways in different states. Insurance rates, of course, always go up and almost never go down; yet the changes in Obamacare may get blame as well as credit, depending on circumstances.
“There is no evidence yet of a premium death spiral in any state that the doomsayers had predicted, or a collapse of insurance markets as carriers exit,” Sara Collins, vice president for health coverage at the Commonwealth Fund, told The New Republic. “Indeed in most states we are seeing the opposite. Moderate average increases, with some major decreases in rates in many states — like Michigan, New York, Oregon — and some major increases — Louisiana. And many flat. And an influx of new carriers in many states that had sat out last year.”
That level of mixed messages may sort itself out as the data for 2015 rate requests become clearer. Common sense, to the extent that has any great relevance to the health care market, suggested all along that the work of doctors and hospitals would increase as more people get coverage.
That utilization spike, like everything else in health care, is a two-edged sword. In the short term, costs soar. The bet at the heart of Obamacare’s complexity is that that’s better than the alternative: people who cannot afford coverage avoid getting care until really sick, in which case recourse to emergency rooms drives up costs to insured customers.
It’s early yet. But an interesting test will be in the states that aggressively implemented Obamacare exchanges and expanded Medicaid coverage for the working poor. In Louisiana, the state’s political leadership made a conscious decision to fight every Obamacare initiative. For now, costs are going up here, but we ought to watch what is going on in other states where circumstances are different.