Since the Affordable Care Act's inception, conservatives have been predicting its imminent demise. The direst prognostications (recession! job losses! tyranny!) have gone belly-up, but it's true that significantly fewer people enrolled in the exchanges than expected. It's also true that insurance costs have risen (though at a lower rate than before). And so Republicans remain convinced that, any minute now, the ACA will collapse under the weight of its own awfulness.
Last week, Wayne Goodwin, North Carolina's Democratic insurance commissioner, gift-wrapped them a present.
In a letter to Sylvia Burwell, the secretary of health and human services, Goodwin argued that Obamacare is driving up costs and running some insurance companies out of the market. "I am concerned with the impacts of insurer withdrawals and consolidations on the health insurance markets in North Carolina," he wrote. "According to my staff, North Carolina had 29 insurers offering individual health insurance coverage prior to the ACA. For 2016, North Carolina has only 8 insurers who still issue such coverage."
Based on anecdotal evidence, he continued, these companies "have left health insurance markets in droves due to the increased burdens of the ACA." Blue Cross Blue Shield of North Carolina, he noted, lost $123 million in 2014. "I am highly concerned insurers may withdraw from the individual market in North Carolina altogether. That is unacceptable."
Critics pounced. "Goodwin: Obamacare Driving Insurers from N.C.," the Carolina Journal crowed. BCBSNC CEO Brad Wilson wrote in a letter to The News & Observer, "It's clear that the ACA requires changes if it is to become a sustainable business model. No business can sustain losses like this."
ACA defenders, in turn, accused Goodwin of being "alarmist." Also, they said, context is needed: "This is not Goodwin's broad thoughts on health reform," Adam Linker posted on the N.C. Policy Watch blog. "Instead it's addressing immediate problems he sees for the stability of insurance companies and agents."
If that's the case, then what are Goodwin's broad thoughts on health reform?
"I do favor the ACA," Goodwin told the INDY last week. He was plainly annoyed at the firestorm his letter set off. He sent it, he says, because Burwell asked for an update. And the headlines—the ACA is driving away insurers!, etc.—led people to "[misinterpret] what I wrote."
"This is a great example of the massive and complex interconnectivity of causation," he says.
What he means is that many things that are creating this instability, and many of them are self-inflicted wounds. The state's failure to expand Medicaid—which leaves an estimated half-million people without health insurance, even as more than 600,000 have signed up for plans through the ACA—has driven poorer and sicker people to the exchange.
"That's why Blue Cross is taking it on the chin," he says. "These are folks the company is paying greater costs for the coverage. Without Medicaid expansion you'll see more of this problem."
And when the legislature reversed the state's plan to establish its own insurance market, instead relying on the more cumbersome federal exchange, that both scared some insurers out of the market and limited Goodwin's ability to rein in health insurers the way he can car or home insurers. So he can't, for example, require insurance companies to phase in higher premiums over a period of several years—which is why you're seeing double-digit increases.
He also faults a portion of the ACA itself. Congress promised insurers that, for the first few years, they would be reimbursed for losses. That created a perverse incentive for insurers to underprice their plans and gain market share. But Congress didn't allocate enough funds to actually pay all of those losses. So when the shortfall came, insurers demanded steep rate hikes and threatened to abandon the exchange.
Congress could fix that, Goodwin adds, but it probably won't.
"The gamesmanship needs to be ended," Goodw says. "They need to look at what's happening in the real world. They've lost the art of compromise. All these things fit together."