When President Obama launched the Affordable Care Act, popularly known as Obamacare, in 2010, many saw it as a dream come true. Lower income individuals and households, who previously hadn’t had the money for basic health insurance, were now fully covered for treatments, medications, necessary procedures, and more.
However, over the last few years, some have found the plan to be more effective than others. A variety of problems have arisen, and for many the Affordable Care Act is no longer affordable. Premiums are going up and the cost of certain medications is skyrocketing. For some, Obamacare is a godsend, but for others it’s turning into a nightmare. Arizona is the epicenter of that nightmare.
A Lack of Competition
One of the things that keeps healthcare affordable is competition. When consumers have a variety of options for their insurance, it’s in the providers’ best interest to keep their prices low, to give them an advantage over their competitors.
In 2013, Arizona had this kind of competition. With the launch of insurance marketplaces, eight different companies offered their services in the state, each fighting for business with the others. The result was some of the lowest healthcare premiums in the nation. However, recently, things have changed, as have the prospects for Obamacare.
For the coming year, nearly all counties are only offering one insurance option, with only Pima County putting forth two. With this sudden lack of options, premiums in 2017 are going up significantly for most of the citizens of Arizona, with some more than twice as much as they were in 2016.
Though the situation is the most severe in Arizona, similar events are occurring all over the country. An estimated third of counties in the United States will have only one exchange insurer in 2017—up from only 7% this year. Rates are going up in response, and many people are now finding themselves unable to afford the premiums.
High Losses for Insurers
What’s caused this sudden lack of options and increase in premiums? Part of it seems to be poor planning on the part of the insurers. At the beginning, in order to stay competitive, they kept their prices as low as possible. The problem is healthcare, even under Obamacare, costs money.
The more procedures and medications and doctor’s visits insurers had to cover, the more it cost them. They had hoped to be protected from significant losses, but it didn’t turn out that way. They also gambled they would have more people paying in than patients requiring costly treatments, and they lost that bet. Many insurers ended up going into debt, and then pulling out entirely from counties that were costing them too much money. With just a single provider left in those areas, premiums are going way up to cover the costs they expect to see going forward.
In response to this problem, Arizonans whose insurance isn’t federally subsidized will be given a few extra options outside the exchange, to keep them from having to go without care. Even so, many are worried that they won’t be able to find the care they need. Some fear that their current doctors might not be covered under a different plan, forcing them to go through the motions with someone new.
The solution isn’t ideal, but at the moment, it’s the best many can hope for. For the future, President-elect Trump has proposed repealing Obamacare entirely, or at least significantly revamping it, in order to fix these problems. For the moment, all we can do is wait and see.