Obamacare’s fourth open enrollment period begins tomorrow — and what a fitting epilogue to Halloween. After all, when Americans log on to either their state or the federal health insurance exchanges, they’ll be in for a fright.
What they’ll discover is a witch’s brew of double-digit premium hikes, restrictive provider networks, and fewer coverage choices. Many exchange customers will have only a single insurance provider to pick from. And more than a million enrollees will find that their current plans have vanished from the exchanges.
Even the rosiest projections expect the online coverage markets to be veritable ghost towns. Given the “tricks and treats” on offer, it’s no wonder.
For starters, rate hikes have reached levels unimaginable before Obamacare. Nationwide, the lowest-cost bronze exchange plan will cost over 28 percent more, on average, in 2017. And according to the Department of Health and Human Services (HHS), premium hikes in the 38 states covered under HealthCare.gov will rise by 25 percent.
Many areas will have it a lot worse. In Phoenix, for instance, premiums for the cheapest bronze plan will surge more than 176 percent. In Oklahoma City, prices are up nearly 80 percent; in Chicago, almost 65 percent.
These are precisely the kinds of premium spikes Obamacare was supposed to prevent. Commenting on similar rate increases during a 2009 town hall, the president warned, “If we don’t act, these premium hikes will just be a preview of coming attractions.”
Now that the president is the one responsible for rising insurance prices, he seems far less worried. As he argued in a recent speech in Miami, premium hikes “won’t impact most of the people who are buying insurance through the marketplace, because even when premiums go up, the tax credits go up.”
But what about the millions of Americans who buy individual insurance plans, either on or off the exchanges, and don’t qualify for federal subsidies? They’ll have to bear the full brunt of the premium hikes.
Premiums are rising in part because insurers have been scared off the exchanges by massive losses. Even the non-profit CO-OPs created by Obamacare have fallen on hard times. These health plans were put into the law as an alternative to a “public option.” — the government-run insurance plan that was ultimately scrubbed from Obamacare by the Senate. To date, 17 out of the 23 CO-OPs have failed.
In nearly one-third of counties, exchange enrollees will have a “choice” of only one health insurer, according to an analysis from the Kaiser Family Foundation. In another 31 percent of counties, Obamacare has created a duopoly.
Even Blue Cross Blue Shield — the mainstay of the individual insurance market for decades — is finding Obamacare difficult to cope with. Thanks to massive losses, Blues plans have exited exchanges in Arizona, Tennessee, Minnesota, and Nebraska.
Aetna, Humana, and UnitedHealth have also substantially scaled back their exchange presence. Thanks to these departures, more than a million Americans will be pushed off their current plans and forced to settle for new — and likely more expensive — policies.
For many Americans, switching plans will also mean switching doctors. That’s because Obamacare has brought one of healthcare’s evil demons back from the dead — the dreaded HMO. These are the health plans with restricted provider networks that consumers overwhelmingly rejected in the 1990s — and with good reason.
HMOs typically offer lower premiums by confining patients to a narrow network of approved hospitals and doctors that have agreed to accept meager reimbursement rates. Patients who wish to seek care outside the network typically must pay for it on their own.
By saddling them with federal mandates, Obamacare has given insurers little choice but to revive zombie HMOs as a way to reduce costs. Consider that HMOs’ share of the market for employer-sponsored coverage fell from 31 percent in 1996 to just 15 percent this year — no doubt because workers told their employers that they wouldn’t stand for narrow networks.
Yet in Obamacare’s exchanges, HMOs are on the rise. Their share of the market climbed from 46 percent to 62 percent in just three years, according to a McKinsey analysis of 18 states.
Not surprisingly, Americans won’t be lining up for this healthcare horror show. The administration expects about 13.8 million people to sign up for 2017 coverage. That’s far below the 23 million predicted by the Congressional Budget Office back in 2010 – and not much better than this year’s disappointing enrollment season, when 12.7 million signed up.
Other analyses offer far more ghastly enrollment projections. One from Goldman Sachs predicts that enrollment could come in 20 percent below this year’s level, given the surge in premiums and deductibles and the departure of insurers from so many Obamacare markets.
Even if 13.8 million Americans do sign up, many will drop out over the course of the year, as happened in previous years. Of the 12.7 million people who initially enrolled in the exchanges in 2016, it is predicted that only 10 million — or possibly even fewer — will still be signed up at the end of the year.
Meager competition, low enrollment among young people, skyrocketing costs, and an utter lack of choice is more than enough to send customers running scared from the exchanges. When they open for business tomorrow, Obamacare’s administrators will be learning that frightening lesson the hard way.