Insurance Bigwigs’ Obamacare Predictions: Nobody Knows, But It Will Be Great

by Dustin Siggins
Industry players are pleased by a law forcing people to buy their product.

What is the future of the Affordable Care Act (ACA)? According to three of the nation’s top health insurance executives, nobody really knows. But that’s not stopping these same three experts from claiming Obamacare will get better in the long run.

In a Politico Pro health care breakfast briefing discussion Tuesday morning, executives from Health Net Inc., the trade group America’s Health Insurance Plans and Tufts Health Plan discussed the impact of the Affordable Care Act, specifically, “how providers are planning for the new health care landscape, and lessons learned since October.”

All three experts made inaccurate statements during the briefing, which was cosponsored by CVS Caremark.

Perhaps most importantly, the entire panel — including Health Net president and CEO Jay Gellert and America’s Health Insurance Plans (AHIP) president and CEO Karen Ignagni  – appeared to agree that the ACA had led to the coverage of 8 million Americans through insurance exchanges and as many as 6 million through Medicaid expansion.

In early April, FactCheck.org found that between one and three million Americans were covered through Medicaid expansion, citing a report from the administration that President Obama has exaggerated.

The 8 million claim is also misleading. The Obama administration has a flexible definition of what it means to have coverage under the exchanges — which is why one Health Affairs analysis found that “in the end, 6 to 7 million average enrollees is probably a reasonable estimate.”

Furthermore, some of this coverage includes people who are changing from insurance that was made illegal or otherwise eliminated by the ACA to ACA-approved insurance. A RAND study found that number could be as high as 1.4 million.

Next, Gellert and Jim Roosevelt, CEO of Tufts Health Plan, both indicated the ACA provides the opportunity to be covered, and covered affordably, via the individual mandate. More correctly, though, the individual mandate instituted a requirement to be covered, as all Americans had the opportunity to be covered pre-ACA — the question was merely that of cost.

The cost of health insurance has skyrocketed in recent decades, despite — and partially because of — innumerable government regulations and policies. There is no single cause, of course — other major factors include the graying of America and greater health insurance costs to help senior citizens live longer and better.

Nevertheless, for many Americans, the ACA has increased the cost of premiums and care.

Interestingly, multiple panelists claimed that more market options, i.e. competition, are necessary to lower costs in the American health care system. However, they all seemed to support the ACA, which creates an indirect form of price-fixing for insurance companies, regulates smaller competitors out of the industry, and effectively turns the health insurance industry into a public utility. And public utilities had a profit margin more than 50 percent above that of health insurers in 2012.

Related, Gellert called the ACA a “bail-in” for insurance companies, noting that they will be paying $100 billion in additional taxes over the next decade to help fund the ACA. While the regulations and related costs for insurance companies are enormous, they are unlikely to offset the profit advantages insurance companies will see from what one health care lobbyist described as “an additional 30 million or so people buying their product.”

Finally, Roosevelt — who had been considered to head the Social Security Administration in 2013 — praised the individual mandate in Massachusetts. He said that the Massachusetts law, with its individual mandate, provided the opportunity “to get covered.”

This is a partially misleading explanation of what the mandate does. All Massachusetts residents had the opportunity to have insurance coverage prior to the enactment of Romneycare — the question was largely a question of affordability. On the federal level, while many claim Obamacare will lower health care and health insurance costs, increasing government regulations and the involvement of third-party payers tend to increase costs.

In other words, again, there appears to be a direct relationship between the increasingly direct involvement of insurance companies and government regulations in health care… and growing cost. As I wrote last year, the research group McKinsey estimated that from 1960 through 2009 GDP was outpaced at a 5-to-1 rate by health care costs. During that time, programs like SCHIP, Medicare, and Medicaid were brought to life, among other federal health programs, and the WWII-era tax incentives remained largely unchanged.

Likewise, the individual mandate was created in large part to offset costs emergency rooms have seen since 1986 — when Ronald Reagan signed into law a mandate that emergency rooms not turn people down for care.

Overall, the discussion gave a lot of wonkish insight to how the insurance industry views the future of the ACA: Confusing, uncertain, but a net positive, overall. Then again, if the government were forcing 30 million new customers to buy what I was selling, I’d think a new law was pretty beneficial too.

Dustin Siggins is the D.C. Correspondent for LifeSiteNews, a former blogger with Tea Party Patriots, and co-author of the forthcoming book Bankrupt Legacy: The Future of the Debt-Paying Generation.