News: CJ Exclusives

N.C. Obamacare Patients See Surging Premiums

Plan-jumping becoming an annual expectation for many

Photo Credit: Shutterstock
Photo Credit: Shutterstock

As the Jan. 31 deadline to obtain a health insurance policy for 2016 on the federal health exchange looms, enrollment has grown slightly, but individuals signing up for Obamacare in 2016 should expect to pay premiums that are between 20 percent and 30 percent higher than those charged last year.

According to the Centers for Medicare and Medicaid services, as of mid-January 563,830 individuals in North Carolina have enrolled in Obamacare plans. The U.S. Department of Health and Human Services said 560,357 were enrolled in the federal health insurance marketplace in 2015.

Blue Cross and Blue Shield of North Carolina is hiking its rates for 380,000 customers by an average of 32.5 percent. The state’s largest insurer of the individual market abolished some plans in the Charlotte and Triangle regions, directing some 55,000 people to seek new coverage in smaller provider networks.

Coventry Health Care of the Carolinas, an Aetna company, will raise rates an average 23.6 percent for 117,000 policyholders. United Health Care is increasing the average rate paid by its 86,223 customers 20 percent in 2016.

According to the Gallup-Healthways Well-Being Index, 20.4 percent of North Carolinians had no health insurance in 2013. By the middle of 2015, that fell to 14.7 percent.

The Kaiser Family Foundation puts the number of uninsured eligible for an individual Obamacare plan at 1,138,000. Of those, 25 percent would qualify for a health policy premium tax credit; 40 percent would not. Another 21 percent are in the coverage gap that would have been eligible for Medicaid had the state expanded that federal entitlement program.

Teresa Parrott of Durham said her experience with Affordable Care Act plans has been disastrous.

“This Obamacrap. It’s for the birds,” she said. “I don’t see how this is helpful for the average American at all.”

Parrott was 62 when her job was eliminated in 2013 and she went into early retirement. She found a policy on the federal exchange for a $129 monthly premium, though she received substantial subsidies.

“The taxpayers were paying over $600 a month for it. And the insurance was no good. I couldn’t use it at any of my doctors,” but was able to buy her prescriptions under the plan, Parrott said.

In 2015 her cost for the same policy jumped to more than $300 a month “and I still couldn’t use it,” she said.

She switched to a less expensive BCBSNC policy, which ended up being the only Blue Cross plan her doctor would not accept.

“It’s just a sorry policy basically,” Parrott said. “I paid $99.92 a month for 11 months, never used it one time,” and meanwhile the government was still paying for her tax credits.

She turns 65 in March and will enroll in Medicare. To avoid the $695 penalty for being uninsured, she sought the cheapest plan available for January and February.

“So now I have a policy that costs me nothing, but it costs the taxpayers over $600 a month. That’s ridiculous, and I can’t use it because nobody accepts it,” Parrott said. “So what is the point of paying out of pocket for insurance that you can’t use?”

“With some of these plans, especially in the individual market, people are facing $12,000 deductibles before an insurance company covers anything, so you might as well be uninsured,” said Katherine Restrepo, health policy analyst for the John Locke Foundation. “Just because you have insurance does not mean you have access to care.”

Parrott’s plan-jumping is characteristic of Obamacare’s disruption in the health care market.

“Every year now people are having to switch their plans,” said Duke research scholar Chris Conover, who monitors the Affordable Care Act’s implementation and impacts.

Even the administration, which once notoriously claimed those who liked their plan could keep their plan, now says “You need to switch plans if you want to get the best rate,’ ” Conover said.

“Now we’re going through this system of endless churn,” he said. “It’s not an optimal model for insurance coverage,” especially when a consumer can’t keep the same doctor.

Devon Herrick, senior fellow and health economist at the Dallas-based National Center for Policy Analysis, said Texas, like North Carolina, is losing more money on the exchange plans than average.

“First, the only people who are willing to buy coverage are those who get subsidies,” Herrick said. Those earning less than 250 percent of the federal poverty level get cost-sharing subsidies in addition to premium tax credits.

Because health status and wealth are correlated to a large degree, “a [low-income] risk pool is likely less healthy than a wealthy risk pool,” Herrick said. Many exchange enrollees were uninsured and may not have seen a doctor in years.

“Imagine what would happen if someone with no out-of-pocket costs went to see a doctor for the first time in a decade. I suspect they’d be an easy mark for ‘anything goes,’” Herrick said. “All the people with pre-existing conditions, who had not enrolled in health coverage in years past due to the cost, probably jumped at the chance for subsidized coverage.”

Gaming of the enrollment rules further complicates matters. While there are specific open enrollment periods, they were extended in 2014 and 2015 to let more people enroll.

“Some probably took advantage of that, and waited until they needed medical care before signing up,” Herrick said.

“Once they received surgery or had that baby, many dropped out,” he said. With nearly 30 special enrollment categories, “It’s rather easy to game the system and wait until you’re sick to sign up.”

Indeed, compared with 2014, Blue Cross reported that from January to June 2015 its ACA patients had more chronic illnesses and higher than expected demand for expensive health care services, emergency department visits jumped 27 percent, prescription drug costs rose 33 percent, and most who dropped coverage used expensive medical services before terminating their insurance.

“I don’t believe it’s going to get any better,” Herrick said.

Dan E. Way (@danway_carolina) is an associate editor of Carolina Journal.