The problem: Premiums in the Affordable Care Act marketplaces have been rising sharply, with the average increase for the benchmark “silver plan” up 21% this year. Proposed rates for next year will range from a 49% increase in Wilmington, Delaware to a 5% decrease in Providence, Rhode Island.
But the non-group market is actually fairly small, covering about 18 million people, with about 10 million of them in the ACA marketplaces which have received so much attention.
The perception: A Kaiser Family Foundation poll this month found that when people read headlines or hear about “premiums soaring” in the ACA marketplaces, most Americans — 76% — they think they are hearing about their own premiums, even though the vast majority of Americans are not in the individual insurance market and are not affected. (A smaller but sizeable percentage believe they are affected when they hear about counties with no or limited insurance options in the ACA marketplaces.)
There are several reasons for this, and the media bears some of the responsibility. Health journalists have generally done an outstanding job covering the issue, but sloppy cable headlines, commentary from pundits, and spin from politicians have too often implied that everyone in America is affected when they are not.
For context: In fact, the rest of the health system where most Americans get their coverage looks very different from the non-group market. As the chart shows:
- Average premiums in the employer insurance market, where 151 million Americans get their health coverage, rose by an average of just 3% last year. And we’re expecting continued moderation this year.
- Likewise, per capita spending for Medicaid is projected to grow a modest 3% in 2017, with per capita Medicare spending growing by just 2 percent.
The back story: Insurers and regulators have been struggling with a unique set of issues in the non-group market, most especially a sicker than expected risk pool and the uncertainty surrounding Trump administration policies. The most important areas of uncertainty have been whether the administration will continue to pay out the $7 billion in cost sharing subsidies and enforce the individual mandate.
But even before the ACA, the non-group market was also the weak link of the insurance system, with sick people priced out or excluded from coverage altogether.
What to watch: Some think a deal on stabilizing the non-group market could be as narrow as an agreement to appropriate the $7 billion in federal cost sharing subsidies in exchange for greater flexibility for states under the ACA. That might not be a slam dunk if that flexibility trips over third rail issues, such as endangering coverage for people with pre-existing conditions.
But whether the formula for a bipartisan deal is that one or another one, policymakers will have a better chance of addressing the problems in the marketplaces if they forge a narrow agreement. And the debate stands a better chance of not spinning out of control if the news media works overtime to help the public understand who is affected and who is not.