More than six years after its passing, Obamacare remains controversial.
In the past few weeks, states have begun to approve premium rate increases for 2017 ACA (Affordable Care Act) health plans. (Insurance carriers need to submit their rate changes to a state commission, which can then approve or deny their request.)
So far, it’s not pretty. Average 2017 monthly premium rates for individuals will likely increase by about 25%. In some states, increases are projected to be 50% or higher. While some increases might naturally be expected, these are surprisingly high and a troubling sign for the future of Obamacare. It’s also worth noting that coverage under these plans, especially for prescription drugs, can be very limited.
In addition, a number of carriers have dropped out of the markets, decreasing competition.
There are a number of reasons for the price hikes—many reports mention that fewer young, healthy people are signing up than expected.
Many people have called for Obamacare to simply be terminated. However, it’s not that simple. There are many aspects of the program that most Americans support, such as eliminating pre-existing condition limitations and providing lifetime caps on patient out-of-pocket spending.
Also, if you ended Obamacare, what would you replace it with?
This week, Megan McArdle at Bloomberg wrote an insightful article about the challenges facing the program and potential fixes. She pointed out that any potential fixes are fraught with challenges. Some possibilities include:
- Increase subsidies. Have the government offset the rising premiums with greater subsidies. This seems unlikely to pass in our current political climate.
- Increase penalties. Some argue that Obamacare only works when everyone is signed up—both sick and healthy individuals. Current penalties for folks who don’t sign up aren’t severe, so many people just don’t bother. In theory, if more healthy people are paying premiums, it would bring down the average cost for everyone.
- Provide a public option. Create a government-run health plan to compete with the carriers and offer coverage when the private sector won’t.
- Scrap the whole thing. Republicans have talked of replacing Obamacare with a private option, with less government involvement, less regulation, and greater use of consumer-directed health savings accounts.
At GoodRx, we don’t have the answer. We do know (because you tell us) that insurance providers—both Obamacare and private plans—continue to shrink their prescription drug benefits and you’re left paying a bigger bill. While GoodRx can’t control insurance premiums, we will continue to find new ways to help consumers get the medications they need at a price they can afford.