This is what a death spiral looks like.
Insurer Anthem Inc. is looking to exit “a high percentage of the 144 rating regions in which it currently participates.”
Anthem has been single-handedly propping up Obamacare in many states, and its departure would leave some consumers in Colorado, Kentucky, Missouri, and Ohio with ZERO Obamacare insurers available. Consumers will face fines for failing to buy a product that is not available to them.
According to the article, Anthem lost $374 million in the individual market in 2016, and is pleading with the administration for regulatory relief so they can stay in the market.
With the failure of the GOP to repeal Obamacare, we are about to witness an amazing shift in coverage of the failing health care law. When the GOP was campaigning on repealing Barack Obama’s signature legislative accomplishment, we were treated to glowing coverage of how the law has helped pull us out of some sort of medical dark age (i.e. 2009). Now that the narrative can include GOP inaction, that shine is starting to come off.
I have been able to watch this spiral first hand. I’m no longer in the individual insurance market, but I was the year before Obamacare was implemented. Shopping online for plans before Obamacare, there were a dozen providers, and hundreds of plans available. I was able to insure my family of 4 for $600/ month, with a $5000 deductible. Within a year of Obamacare’s implementation, my plan was cancelled, replaced by a $1000/month plan, with a $12,000 family deductible. Today, there are only 2 providers available for the individual market in my area of Colorado. One of them is Anthem, and they are leaving.
This is why the House Freedom Caucus’s insistence on removing the “Essential Health Benefit” (EHB) regulations from Obamacare is so important. Those regulations are having a huge impact on insurance providers, and on premiums, creating a market with no suppliers, and an expensive, undesirable product.
If the GOP wants to run on a successful reform effort in 2018, it has to demonstrate to voters that the repeal and replacement produced lower premiums, more insurance options, and less frustrating waste in the market. Leaving EHBs means that a one of the largest contributors to the insurance market failure remains unsolved, and simply re-brands this Death Spiral as a GOP creation.
The laws of supply and demand cannot be repealed, and the Obamacare replacement needs to reflect that reality.