With the announcement late last week that eight million people had signed up for Obamacare, it seemed for a while a new wave of spin was upon us. From the president himself came this: Republicans “can’t bring themselves to admit that the Affordable Care Act is working.” And from Republican House leader John Boehner (via spokesperson) came this: “The White House continues to obscure the full impact of Obamacare.” What’s a reporter to do? Serve up the standard he said/she said mix by repeating the president’s proclamation that eight million sign-ups equals success, and then quote Republican naysayers sticking to their talking points? Simply point out the holes in the White House numbers—lay out what we still don’t know, a point made by much of the media coverage? Or, move on and plow new ground in anticipation of the next open enrollment this fall?
My vote is to use the plow and stake out the consumer and business stories that I’ve argued have often been eclipsed by the politics of the moment. Parsing last week’s coverage gave me some specific ideas of where reporters might dig now.
Who’s dropping coverage? The eight million sign-ups is not likely to be the real number, but finding out who’s scrapping their coverage will get us closer to an actual count. For me, the real jumping off point came from a story last week by Katie Kerwin McCrimmon, who writes for Health News Colorado. In a detailed piece discussing how the state’s exchange was about to tax policyholders to pay half of its operating expenses, McCrimmon reported that Cammie Blais, the exchange chief financial officer, estimates that as many as 20 percent of Colorado’s 124,000 enrollees had dropped their insurance for a variety of reasons, including nonpayment—a revelation important in other states. Up to now, we’ve had insurers estimating that 15 to 20 percent of enrollees had not paid their premiums, but now there’s a hard number from an exchange showing not only those who didn’t pay premiums but also those who dropped for other reasons.
Why are enrollees changing their minds? In the push to get enrollees to sign on the dotted line, sales pitches from the White House and its allies may have overpromised. In the days before the deadline, for example, Organizing for Action, a group that sprang from the president’s reelection campaign network, tweeted like crazy. One example: “For Jake, $15 a month on health care fits into his budget.” But, what did Jake have to pay out-of-pocket? Probably a lot! That wasn’t part of OFA’s sales pitch, which had the flavor of those shoddy sales practices that once drove state attorneys general nuts but now seem perfectly acceptable in the context of selling Obamacare. When people find out they aren’t getting what they bargained for and must pay high amounts of cost-sharing, buyer’s remorse can set in, and they junk their coverage. Reporters should find some of these people and talk to them. It’s a good way to advance the story of The Great Cost Shift.
Will those who signed up stay with their plans next open enrollment? A Gallup poll released last week found that 78 percent of the newly insured had incomes less than $60,000. That’s the group most likely to be pinched financially when they have to cough up an insurance premium, even a relatively small one. A few days before enrollment closed, I visited a navigator in Denver who was signing up Latino residents. She pointed to a $149 premium from one of the carriers, and told me “even this is too much for our families.” Many families view insurance as an expendable budget item when money is tight.
The president himself said premiums will go up as they inevitably do each year because the cost of medical care keeps rising. But instead of passing along speculation about how much—-double digit hikes or teeny ones—-why not go out and look at how families decide whether or not insurance fits into their budgets. Follow a family like I’ve done with Jeremy Devor in Salem, Illinois. And while you’re on this track, it’s a good time to examine how adequate the tax subsidies will be in the next few years, something few politicians want to discuss.
What happens when things go wrong? The Philadelphia Inquirer just told the story of 39-year-old Michelle Lamb, who contacted the paper after she paid three monthly premiums to Independence Blue Cross that were more than three times the subsidized rate to make sure she was covered—and Blue Cross cancelled her coverage anyway. A bureaucratic snafu, no doubt! Writing about her predicament is one thing, getting a state agency to intervene is quite another. The press has paid little attention to where policyholders can complain when things go wrong. This is insurance we’re talking about, so things will go wrong. Were people who paid their premiums and changed their minds able to get their money back? Are state laws explained somewhere? What happens when people go out of network for care? There are lots of complicated consumer questions here that reporters ought to tackle. And what about when someone’s income changes during the year, resulting in either a bigger or smaller tax bill next April? Who’s explaining that?
What happens when hospitals act as insurers? From the mixed-up tales of American healthcare comes news that hospital systems are beginning to act as insurance companies. We know hospitals are grabbing market power, gobbling up doctor practices, which give them huge leverage over prices. With insurance in their product portfolios, they have even more clout financially and politically. Look at how North Shore-LIJ in New York, which now offers its own insurance, has worked to keep the New York exchange from offering out-of-network benefits like others around the country. It’s self-interest: If patients have North Shore’s insurance, they’re more likely to use their facilities and their doctors and that, of course, improves the bottom line. Keeping track of the healthcare economics in your community and spotlighting the practices of those who have the upper hand is far more important to audiences than fixating on whether young people make up 20 percent or 30 percent of the sign-ups for the relatively small number of Americans who will shop in the exchanges.
Is business off the hook? The Affordable Care Act called for employers to share the task of covering the uninsured, and requires businesses with more than 50 full-time employers to provide health insurance or pay a tax penalty. After a heavy lobbying campaign, employers got the administration to delay the mandate. Last summer, fines for not providing coverage were pushed back until 2015. In February came another delay. Businesses with between 50 and 100 workers don’t have to offer coverage until 2016. The mandate is supposed to be phased in for bigger employers. But will it? All these changes affecting the business community are being made ever so quietly, as the AP just reported with its scoop on the repeal of out-of-pocket spending caps for policies sold to workers in small businesses.
Are premiums too low? Yes, there really is such a thing, but it’s not part of the current narrative. There was a hint of this in a Friday New York Times piece on UnitedHealth Group’s latest financial results. On an investor call last week, United’s CEO, Stephen J. Hemsley, disclosed “we believe several carriers there [in New York], including new entrants, are pricing well below cost and what we would view as unsustainable pricing levels.” If Hemsley is right, that’s bad for all those New Yorkers and people in other states enticed to buy cheap insurance hailed by supporters as “affordable” coverage. When insurers have captured the market share they want with these sweet deals, things could turn sour for policyholders as they raise their prices.
If you need proof for your stories, take a look at what happened in the market for long-term-care insurance. In the early days, those policies were underpriced as a deliberate strategy to reel in new customers. Premiums went up eventually as sick people filed claims. Claims disputes arose. Regulators granted rate increases. Policyholders cancelled. Some insurers lost their shirts, left the business, and left policyholder with few options.
And this brings us back to those consumer story threads to unravel. When carriers have met their market share goals but profit goals slip, will premiums rise beyond what consumers can pay—even with subsidies that may or may not keep pace with the premium increases? Looking into that question will shed light on whether those with low and moderate incomes will hang on to their coverage or go bare. In my view, that will ultimately determine the success or failure of the Affordable Care Act, and that’s the story we need to follow.
More in The Second OpinionRead More »