OP-ED Obamacare: The 'Unaffordable' Care Act’s Impact On Alaskans And Small Businesses
The opinions expressed herein are those of the authors.
We are now seeing how detrimental the "Affordable Care Act", (also called "Obamacare") is to small businesses and individuals throughout Alaska. The intent was admirable - provide access to affordable health insurance. However, that was not accomplished. Premiums have skyrocketed. Deductibles and out of pocket maximums are higher than ever.
As an independent insurance agency in Southeast Alaska, we see firsthand how this "unaffordable" law has impacted small businesses and individuals. We have worked in this industry over 20 years. We understand its deficiencies. However, this law failed miserably. It does not address the problems and instead created new ones.
Promises were made: If you like your health plan, you can keep it" and ". . .if you like your doctor, you can keep your doctor." Statements made by President Obama that were ultimately not true.
The intent was to reduce the cost of health insurance. However, recent announcements by Premera Blue Cross and Moda Health, confirm this is NOT true in the individual market in Alaska. These are two of the larger carriers available in the State.
Rates are determined by costs generated from payment of actual claims. Premera announced that of 7,000 individual insured members, 33 incurred more than $7 million in claims in the first half of 2014, coinciding with implementation of Obamacare - 33 out of 7,000! The increases result from a handful of people needing expensive health care, confirming it is the COST of treating the illness and NOT the number of people newly insured! It was anticipated that young individuals would enroll to help offset the cost of treating the elderly and the very sick. They are NOT enrolling, thus higher premiums.
The increase in premium is a direct result of Obamacare - not carriers, or the Governor as some political pundits would have you believe. You cannot mandate more coverage for more people and have it cost less. To suggest otherwise is disingenuous at best. It is misleading to suggest this increase is related to Medicaid expansion. It is not!
The law requires all plans now include a variety of new benefits. Individual plans must include maternity - whether you are a single young man or a 60 year old woman - your premium includes the cost of this benefit. You cannot decline. Some of the new benefits were needed, many were not. Mandated benefits simply add cost to premium for a service many will never need or utilize.
Insurance carriers are now required to provide coverage to everyone - regardless of pre-existing conditions. That is admirable, but not financially sustainable. Carriers can only charge a pre-determined premium approved by the Department of Insurance. Under Obamacare, it is now exposed to unlimited cost. The 33 individuals impacting Premera plans are a direct example of how that is not sustainable.
Since the implementation of Obamacare, we have seen renewals as high as +70%. How is that affordable? These increases are a direct result of mandates and requirements under the law. We work closely with employers and individuals to find the best insurance coverage possible that is also financially sustainable. This was already difficult due to the limited number of insurance carriers who conduct business in Alaska.
Groups will continue to cancel plans because they cannot absorb the rate increase resulting from implementation of Obamacare. Their intent was to provide an invaluable benefit for their most valuable asset - their employees. However, for many small groups and individuals - maintaining coverage is not an option. Businesses are reducing their workforce or declining to hire due to the requirements of mandated coverage.
There is no "free lunch" - right? If insurance is provided to everyone regardless of medical care required; if policies must contain benefits people will never use or need, who pays? There are approximately 20 different new fees or taxes associated with the "Affordable" Care Act. Individuals not receiving a premium subsidy are paying a large portion of premiums for everyone else. You may receive subsidized insurance now, but you may also lose your job if your employer cannot afford to pay for the insurance plan mandated by Obamacare and is forced to reduce its workforce.
Obamacare's negative impact on Alaskans - small businesses and individuals alike - is increasing. Subsidies and tax credits are only intended to last 2-3 years, not forever. Premiums will continue to increase when assistance is no longer available. The "Cadillac" tax is scheduled to take effect in 2018. For Alaska that is an estimated 40% increase above already inflated premiums under Obamacare.
It is obvious, there is nothing "affordable" about the Affordable Care Act. The negative impact of this ill-conceived law will continue to penalize small businesses and individuals in Alaska. Instead of mandating coverage and implementing new fees and taxes, the cost of care needs to be addressed. Obamacare is a bad fit not just for Alaska, but our nation as well.
Terie Hicks, Account Executive
Diversified Investments & Insurance