In what could be a disturbing portent, Blue Cross Blue Shield of Kansas City on Wednesday announced it was pulling out of the Obamacare health exchanges in 2018. The decision will leave 67,000 people in 25 Missouri counties and two Kansas counties with no option for private insurance, subsidized or not, under the Affordable Care Act.
Blue Cross Blue Shield announced it had lost nearly $100 million on Obamacare policies since 2014; only last year did it take in more premium money than it paid out, and overhead costs pushed the Blues into the red.
GOP efforts to weaken Obamacare will only make such problems worse, yet a proposed Republican replacement plan doesn’t address the ACA’s fundamental design flaw: Sick people sign up and healthy people don’t, so the pool is distorted. Congress has yet to find a better framework than Obamacare to address the nation’s health-coverage needs, so the answer is to fix Obamacare, not replace it.
Most of those who sign up for ACA coverage qualify for federal subsidies, but the payments aren’t high enough to offset the cost of medical care provided. The problem has driven many insurers out of the market. Except in the greater St. Louis area, most of Missouri has only one insurer left.
This problem could have been addressed by offering a “public option” — a not-for-profit government program to compete with private insurers. But that would have been expensive and left the ACA even more unpopular with Republicans than it already was.
Instead of fixing the ACA, Republicans in Congress are trying to replace it. On May 4, the House passed the American Health Care Act, a bill that essentially makes health insurance affordable only for those least likely to need it. It eliminates coverage for millions of Americans and cuts taxes by $40 billion a year for millionaire households. The Senate is now stuck with the unhappy, and perhaps impossible, prospect of fixing the mess.
Meanwhile, the Congressional Budget Office on Wednesday released its “score” of the House bill, finding it would leave 23 million fewer Americans without coverage by 2026. “Less healthy people would face extremely high premiums” and insurance markets would be destabilized in one-sixth of the country, the CBO estimates.
President Donald Trump is still toying with the idea of ending the Obamacare subsidies paid to private insurers, which would cause more insurers to pull out of the market.
The places most dramatically affected by the chaos are sparsely populated areas where people tend to be older and sicker. They are also areas that voted overwhelmingly for Trump, including the 25 Missouri counties abandoned by Blue Cross Blue Shield of Kansas City. Every one of these counties voted for Trump.
Moral of story: Be careful what you wish for.