ACA Open Enrollment Set to Begin Under a Cloud of Confusion

John Baackes, L.A. Care CEO

September 27, 2018

As another open enrollment period approaches, the future of the Affordable Care Act (ACA) remains uncertain. Efforts to repeal the landmark legislation failed, but regulatory measures continue to alter the ACA and it has left consumers scratching their heads. The confusion caused by all the changes could, in the end, prove harmful to consumers who are dependent on the individual marketplace for their health care coverage.

It’s important to understand that the individual market has always existed. There have always been people who did not receive coverage through an employer, and needed another option. That was the rub. Only those who really needed coverage would get it, and that drove prices up. The ACA revolutionized the individual marketplace by creating a mandate requiring everyone have insurance or face a tax penalty, and by offering subsidies or tax credits to ensure one’s ability to pay for insurance.

But critics have taken several steps to weaken the ACA. First, there was the elimination of the Cost Sharing Reductions (CSR), the subsidies paid to insurance companies to reduce co-payments and deductibles. Critics called the CSRs a bailout, but it was simply part of the ACA formula to ensure affordable coverage for the greatest number of people, and there is still a battle being waged in court. 

Then, lawmakers included a repeal of the individual mandate penalty into the tax bill. The penalty served as an incentive to get younger and healthier people into the risk pool which is what helped keep coverage affordable. Repeal of the penalty could destabilize some markets, and it certainly is contributing to premium increases.

Most recently, the so-called Final rule expanded access to short-term, limited-duration insurance coverage. Yes, they are cheaper than ACA plans, but they don’t offer the same guarantees, such as coverage regardless of pre-existing conditions. California lawmakers banned such plans in this state, but consumers in other states will certainly fall into the trap of buying a short-term plan that fails to cover unexpected needs.

I am the CEO of L.A. Care Health Plan, the nation’s largest publicly-operated health plan, which jumped into the ACA marketplace in 2014, as a way to ensure continuity of care for members who might move in and out of Medi-Cal, the plan’s primary line of business. As a not-for-profit plan, with no obligation to shareholders, L.A. Care has been able to fulfill the ACA’s intent – provide affordable health care plans to a growing number of people.

In fact, our ACA membership tripled last year – proof that the landmark legislation is working despite chaotic efforts to undermine the good work it is doing. There is no question that it has needed tweaking from day one, but with some lawmakers focused repeatedly on failed attempts at repeal and replace, no improvements could be made. Still, its popularity continues to rise, and there is less talk about repeal and replace headed into the mid-term elections. Even Medicaid is no longer an attractive target for politicians, since so many constituencies are benefiting from the expansion included in the ACA.

Despite that popularity, the upcoming open enrollment period remains an unknown. Will the repeal of the mandate penalty cause people to drop out? Will the resulting premium hikes result lead to an enrollment decline? My guess is people in the marketplace, especially those receiving a subsidy, will stay in, because they have found value. But, only time will tell.

As Chamber members, some of you may have employees on the exchange. We want you to know that we are here to help in any way needed. If you want us to be involved in explaining what it happening, or providing more information, we are ready to do it. For those who offer health coverage to your employees, keep shopping. The more pressure that the Chamber puts on providers and insurers to be accountable for what they’re charging, the better it is for the industry, and ultimately, for consumers.

 

John Baackes is the CEO of L.A. Care Health Plan. The organization is dedicated to providing access to quality and affordable health care for Los Angeles County residents through a variety of health coverage programs, including Medicaid, L.A. Care Covered (California Health Benefit Exchange), L.A. Care Cal MediConnect Plan and PASC-SEIU Homecare Workers Health Care Plan.



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