Tag Archives: death spiral

Health Policy Updates: February 18 2017

It hasn’t been a good week for Obamacare. More insurers are pulling out, and the Trump Administration seems to be split on whether it wants the exchanges to die now or hang around a little longer to provide for a smooth transition.

“The administration’s zigzags haven’t placated worried insurers, who see another year of red ink from enrollees that are older and sicker than they had expected. Congress’ paralysis on repeal and replacement translates into precisely the kind of uncertainly that makes risk-averse insurers want to run for cover. And Trump’s executive order, signed just hours after his inauguration, unnerved the health plans with its call for government agencies to abolish as much of the law as possible through administrative action. That fueled fears that his administration won’t enforce the individual mandate requiring most Americans to get coverage.”

Continue reading Health Policy Updates: February 18 2017

Health Policy Updates: October 2 2016

This thought piece in the NYTimes’ Upshot column uses an analogy of a football team eating at an all-you-can-eat buffet to describe the problems of adverse selection and moral hazard as they relate to the ACA/Obamacare insurance exchanges. The author (Margot Sanger-Katz) doesn’t use the term “death spiral,” but that sure seems to be where the concerns she raises are leading…

“The restaurant analogy is useful here, too. Imagine two all-you-can-eat buffets. One offers iceberg lettuce, chicken wings and macaroni. Its competitor offers the usual fare, plus lobster, and it charges a bit more. Guess which buffet will attract lobster lovers?…That sort of problem can get worse over time. As the companies increase prices to compensate for having sicker patients, fewer healthy people will buy the insurance.”

It appears that Donal Trump has put his money where his mouth is in terms of supporting the anti-vaccine movement.

Continue reading Health Policy Updates: October 2 2016

Health Policy Updates: September 10 2016

This chart, published by the Wall Street Journal, gets my vote for the best of the week. Especially in a time of modest wage growth, the rapidly rising burden of health care costs on consumers can make people feel “underwater” – like their standard of living lower than it had been in the past. Even as other goods and services get cheaper, health care costs are greedily taking up more of families’ monthly budgets.

WSJ chart wages health care

“The Kaiser Family Foundation, a health-care research nonprofit, found deductibles for individual workers have soared in the past five years, rising 67% since 2010 without adjusting for inflation, roughly seven times earnings growth over the same period. ” Continue reading Health Policy Updates: September 10 2016

Health Policy Updates: August 20 2016

The big story this week from the world of health reform was news that Aetna, another large insurer, is massively scaling back its participation in the ACA/Obamacare exchanges. Large financial losses are cited as the reason. Here is a sampling of related stories:

Announcement from Aetna:

Following a thorough business review and in light of a second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since January 2014 in our individual products, we have decided to reduce our individual public exchange presence in 2017, which will limit our financial exposure moving forward.

Obamacare pullouts have left some areas of the country with very few options, as reported in Bloomberg:

“The dropouts also undermine a key promise of the law: multiple insurers would compete for consumers’ business each year, and the power of the market would control costs and raise quality. Instead, the opposite is happening.”

Continue reading Health Policy Updates: August 20 2016

Health Policy Updates: July 24 2016

A very detailed, and very good, piece in Politico about the ongoing cost problem facing the ACA/Obamacare. Fewer young and healthy people have signed up than anticipated, leaving the average costs higher for everyone else. As a result, insurance companies are losing money, and are raising their prices to try to catch up. Trends like this are concerning that we may be seeing the early stages of a “death spiral,” in which prices continue to rise higher than more and more people are able to afford.

I found this article to cover both the successes and the problems of the ACA in a fair and comprehensive way, and recommend it highly.

“A close look at what’s really keeping the exchanges underwater suggests that some of the problems are self-inflicted wounds by Obama and his administration; others are the handiwork of Republican saboteurs, who undercut the safeguards intended to help companies weather the uncertainty of the new law…None of the problems are insurmountable, but if they aren’t fixed, the law could find itself in a mounting crisis—what observers call a “death spiral”—in which competition vanishes, costs skyrocket, and a dwindling pool of insurers offer policies so expensive that health insurance is as out of reach as it ever was.” Continue reading Health Policy Updates: July 24 2016