ACA future is bleak in North Carolina

Published June 23, 2014

by Stephen Parente,  a Professor of Health Finance, the Associate Dean of the Carlson School of Management, and the Director of the Medical Industry Leadership Institute at the University of Minnesota, published in Charlotte Observer, June 21, 2014.

North Carolina, buckle up. Over the next few months, you’ll learn how much your health insurance premiums will go up for next year. The early evidence isn’t good – the percentage increase could be in the double digits.

But that’s nothing compared to what you’ll face in 2017. In May, I released a comprehensive study showing how the Affordable Care Act will likely play out in North Carolina over the next few years. The diagnosis isn’t good.

First, the short version. In two years, the ACA’s structural problems will lead to substantial premium increases. Once that happens, North Carolinians will likely leave the insurance market in droves. They’ll have little choice – they won’t be able to afford health insurance because federal subsidies won’t keep up with the rapid price increases. Within a decade, this could swell the ranks of the state’s uninsured by 57 percent.

This isn’t baseless speculation. I reached this conclusion using a peer-reviewed economic model published in several health journals. It was funded by private and government sources, including the Department of Health and Human Services, and has been cited by multiple Supreme Court justices in ACA-related rulings.

But why won’t this happen until 2017? Because that’s the year when the Affordable Care Act goes into full effect and certain temporary provisions begin to sunset. The changes will affect all plans sold for 2017 and beyond.

Two big changes will occur that year: Insurance companies will no longer have access to ACA’s “re-insurance” and “risk corridor” programs. The first item currently allows insurers to bill the government for the most expensive patients; the second one guarantees that the industry’s losses will be subsidized by you. When these two programs end, the insurance industry won’t have access to taxpayer money.

That leaves North Carolinians to pick up the tab. Without taxpayer money, insurers in the state will increase plan premiums to cover the sudden shortfall. They’ll have no other choice – the other option is to go out of business.

This will cause a chain reaction in the insurance market. As people leave the exchanges, insurers will have fewer customers who can shoulder health care costs. Thus, for 2018, they’ll have to raise prices again – which will only cause more people to leave. This cycle could repeat itself indefinitely.

This rapid turn of events leaves more North Carolinians who need health insurance from the exchanges. Stuck in this cycle, many will find the tax for not having health insurance a far cheaper option.

The Affordable Care Act’s architects promised that it would make health care cheaper while providing universal health care. Instead, it will make health care unaffordable for many while leaving more North Carolinians uninsured. This health care cure may be worse than the disease.

http://www.charlotteobserver.com/2014/06/21/4993098/north-carolinas-affordable-care.html#.U6gc2hbO8ZY

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June 23, 2014 at 10:43 am
Norm Kelly says:

What an optimistic way to conclude this post: 'This health care cure may be worse than the disease'. Seems to me this is what 2 groups of people have been saying since the debate started. Except these 2 groups were & are more certain that it will be worse, not just maybe.

These 2 groups: first was thinking people.

Second was conservatives.

Both groups were right, have been right all along, and continue to be right. The worst part is that the architects and proponents of this garbage law knew it also. How do we know this? Two ways. First it doesn't fully implement until the current occupier is out of office. If there were any confidence at all that it would be successful, the occupier would have insisted it take effect while he was still occupying and could take credit for it's success.

Second, if it were a good law, the current occupier would not have delayed so many parts of it, contrary to existing law. Which, by the way, is the law he wanted Congress to pass, but then he found he couldn't live with his own law. The occupier has delayed, changed, and exempted since day 1. It also required behind-the-scenes deals with some Congress people in order to buy their vote in support of this disaster.

No news about socialized medicine phase 1 is good. All of the news about phase 1 is bad. All of the news about phase 1 shows that it will do exactly the opposite of what the socialist central planners promised us. How do these socialists respond to this news? Two ways, that I've seen. First is the reaction like the one from our very own K. The challenge with phase 1 is that it didn't go far enough. In the mind of a true socialist, like K, the answer is a full take-over of the health care industry, what K calls a 'single payer system'. Which is lib speak for socialized medicine - a complete take-over by the central planners.

The second reaction from socialists is to claim the reports are from right-wing extremist groups who have been opposed to the scheme from the beginning. None of the information in these reports can be proven true. This is all made up information based on a biased starting point. The information coming from the central planners is much more accurate than the skewed, unreliable information coming from right-wing zealots.

The scary part is that the ONLY place producing information that claims socialized medicine phase 1 is successful or can be successful is from the central planner-supported, left-wing extremist, socialist organizations that look at only a small fraction of the available information in order to draw their conclusions.

The socialists are still claiming that premiums will go down in the future, phase 1 will help reduce the deficit, health services will continue to improve, more people will be helped by phase 1 than could ever be hurt by it. The socialists continue to ask us to ignore the VA Health crisis, that it is not indicative of the curse that is socialized medicine. Even though the VA health system is 100% socialist medicine, the holy grail of the central planners, this does not mean expanding the program to cover EVERY PERSON who occupies our country will make the system worse. And even though the same socialist central planners promised us from the beginning that it would only cover American citizens, the opposite is already in the works. Phase 1 will cover any person who occupies space in the United States. And if it turns out to be an illegal alien, the central planner socialists will tell us that it didn't cost anything to cover that person because the central planners will pay for it, not the tax payers and not the medical institution. Like the money available to the central planner socialists isn't actually tax payer money! They really do think the majority of LEGAL CITIZENS are stupid! The biggest concern at the central planner level is that enough of us will figure out that they are lying to us and demand change. The best thin that can happen for the socialist central planners is for their low-information voters to infect more of their friends with 'reality tv' shows to expand the populace of low-information voters. Low-information voters are the only explanation for the current occupier. Low-information voters can be the only explanation for Hitlery's popularity. Educated voters, high-information voters are libs worst nightmare. They do their best to promote MSNBC and CNN while at the same time attempting to discourage Fox News viewers, and even threatening Fox News with action by the feds to force them to toe the party line. Education is up to each individual, and libs hope enough of their supporters choose not to educate.