By Steve Brawner
© 2016 by Steve Brawner Communications, Inc.
It’s hard to feel sympathy for a giant health insurance company, but Blue Cross and others will try next year to generate at least some understanding from state legislators, and they’ll probably succeed.
They’ll be doing this after the Arkansas Insurance Department last month required them to lower the rate increases they had requested. Those rates are for private individuals who buy their own insurance or have it bought for them through the state’s private option.
Arkansas Blue Cross Blue Shield asked for a 14.7 percent increase for its 213,955 individual consumers. The state told it to drop the request to 9.7 percent, which it did under protest. In a letter to Insurance Commissioner Allen Kerr, Blue Cross Senior Vice President Lee Douglass noted that the Insurance Department’s own private consulting firm had said the company’s request “appears actuarially reasonable” based on the increasing costs of health care. The company’s reserves have been decreasing for the past three years to $1,265 per insured member by the end of 2015 – not enough to pay for a day of inpatient hospital care.
Douglass added this: “We also believe it is important to increase our efforts and resources so all members of the General Assembly are informed of the costs and issues associated with our state’s health care needs as well as any deficiencies in the filing process.”
Which means Blue Cross will be actively working the halls of the State Capitol looking for allies. It no doubt will be joined by the state’s other health insurers, who also were told to lower their rate requests. Qualchoice had asked for increases of about 24 percent and was told to lop off 10 points. Ambetter asked for 8.1 percent and was approved for 4 percent.
This is the part where you’re going to want me to blame someone, and this being Arkansas, that someone probably is President Obama. The reality is more complicated than that.
Without a doubt, the Affordable Care Act, otherwise known as Obamacare, is part of the reason for the increasing rates. The law required insurance companies to stop turning away sick people, and that’s who in large part is signing up for insurance. Sick people cost a lot to insure, especially when their ailments have been building up for a while, and many of the young, healthy people needed to offset that cost have opted to pay the fine rather than pay more for health insurance.
Furthermore, the Affordable Care Act does not allow for the creation of bare bones health insurance plans that cover only the major illnesses, and it doesn’t give states enough flexibility to experiment with ideas that could lower costs.
On the other hand, other factors are at play – particularly the rising prices of specialty drugs that are wonderful and life-saving and very, very expensive. Long-term trends such as the nation’s aging, overweight population are major contributors to rising costs as well.
The truth is that America’s health care system was unsustainable before Obamacare, and it’s unsustainable now. Obamacare made some things better and some things worse, but it did not create the cost problem, nor solve it. The law’s opponents never solved that problem when they were in power, either.
We can’t just “repeal Obamacare” because it’s now the health care system we live under, and just getting rid of it would be too disruptive for everyone. Besides, who would want to go back to the days when insurance companies turned away patients because of pre-existing conditions or dropped coverage when their illnesses became too expensive?
What should happen now is that policymakers should try to fix the system, calling it whatever they must. They should do next year what they should have done in 2009 – engage in a multi-year, bipartisan process that addresses access and cost. A solution should be created that includes ideas and buy-in from Democrats, Republicans, the medical community, insurers like Blue Cross, and average Americans. And then we should try to make it work rather than half of us trying to make it fail.
Unfortunately, America’s political system is too unhealthy to engage in that kind of productive advancement. So next year, at the state level, the insurance companies will ask for higher rates that probably are justified, and they probably will succeed because that’s the kind of “fix” the political system can handle.
And bigger, bipartisan solutions? Those will probably have to wait until the system is healthier – someday.