Tuesday, October 27, 2015

The Plan is Working to Perfection

Expect plenty of vitriol to be unloaded on Anthem Blue Cross/Blue Shield today.  That "evil" health insurance provider has decided participating in the Federal health insurance exchange here is Wisconsin makes little financial sense for them.  That is why they are scaling back the number of plans they are offering in 34-counties--including those here in the Fox Valley--and that's why they have decided to not offer any individual plans to people living in Milwaukee, Racine and Kenosha counties starting on January 1st.

For starters, Anthem--like most of the other carriers in the exchange--is calling for an average 4% increase in premiums.  That means for another year, the Affordable Care Act will not be lowering the cost of health insurance as had been promised.  Plus, deductibles will be increasing an average of 40% on the most common plans.  I already have press releases in the Newsroom calling those increases "outrageous".  What the advocacy groups don't--or refuse to--understand is that without the increased deductibles, the premiums wouldn't go up just 4% but rather by double digits next year.  And for the person who doesn't require a lot of medical care and who is looking just to meet the IRS requirement to have health insurance--and for whom the Federal Government is paying the subsidy--that means a lower cost throughout the year.

Anthem's choice of counties to no longer offer any individual plans is certain to meet with accusations of racism.  How else to "explain" the three counties with the highest minority populations in the state being cut out of  the exchange?  Personally, I wish Anthem would open the books--which insurance companies never do--and show that those three counties likely had the highest rates of enrollment without payment (and remember, the ACA requires insurance companies to cover claims in the window before payment must be received and up until the day that a person gets dropped from their coverage for non-payment).  They likely have the highest cost per claim as well--given the higher rates of chronic disease among low-income residents.  Both of which make it nearly impossible to provide cost-effective coverage to those that actually do pay their premiums.

Of course, numbers mean nothing to people that don't understand how insurance works.  Those of us who do, know that it is a tool for risk management--and that expenses are controlled by limiting the risk to those in the pool.  Everyone who will be crying foul about Anthem's decisions this week believe health insurance is a subsidy program--where the customer should bear almost none of the risk--or the cost--of medical care.  We like to call those people "Bernie Sanders Voters".

So while the insurance companies are operating the way they are supposed to--so too is the Affordable Care Act.  Opponents may want to jump up and down and claim that what Anthem is doing is proof ObamaCare is failing--but they forget that the ACA was designed to fail from the beginning.  It's shortfalls, lack of providers and continued rising costs are all meant to provide talking points for the next crop of Democratic candidates and for the advocacy groups to say "See, even making things 'fair' for consumers isn't enough--we need to abolish individual health insurance and go to a single-payer, Government-run system."  You might say their nefarious plan is working to perfection.

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