At last week's presidential debate, Vice President Kamala Harris was asked about her previous support for Medicare For All, a $44 trillion proposal that would outlaw private insurance. She backed away from the questions, saying, "What we need to do is maintain and grow the Affordable Care Act."
It just goes to show how oblivious Democrats are to the worsening state of Obamacare — particularly the law's health insurance exchanges.
According to a new study by the Paragon Health Institute, the past few years have seen a dramatic drop-off in the quality of exchange coverage. So even as premium subsidies for marketplace plans have grown more generous, patients — and taxpayers — have been getting less for their money.
There are plenty of opportunities to halt this decline — and improve the quality of coverage. But instead of reconsidering some of Obamacare's worst features, Democrats' insistence on "maintaining and growing" the health law quite literally promises more of the same.
The Paragon paper looks at three specific factors to evaluate the quality of exchange coverage: the extent of a plan's provider network, the share of treatment costs that fall on the patient as opposed to the insurer, and the amount patients pay in monthly premiums.
On all three measures, the authors find that exchange plans have gotten worse in recent years — especially compared to coverage offered on the employer market.
In 2014, the share of marketplace consumers with a broad-network plan was 36%. By last year, that figure had fallen to just 11%.
Next, the authors consider the "actuarial value" of exchange plans over the past few years — that is, the share of claims insurers are expected to cover. Platinum plans must cover at least 90% of claim costs, gold plans 80%, silver plans 70%, and bronze plans 60% percent.
The authors found that the share of exchange customers earning above 200% of the poverty level — just over $30,000 for an individual this year — who are enrolled in lower-value bronze plans has soared from 33% to 54% over the past 10 years.
In other words, the share of health costs shouldered by marketplace enrollees has increased dramatically.
Monthly premiums for exchange plans, meanwhile, have also ticked up 50% more quickly than plans in the employer-sponsored market.
Add it all up, and exchange plans have gotten more expensive, less generous, and more restrictive about which doctors are in-network. Does this sound like a program anyone should seek to "maintain and grow?"
Fortunately, the authors have several promising ideas for arresting these trends. One involves changes to Obamacare's "risk-adjustment program." The program compensates insurers for covering sicker, higher-risk patients by transferring money from insurers that cover enrollees with fewer medical needs.
But the program inadvertently makes certain patients — namely, lower-income ones who receive cost-sharing reduction subsidies from the government to help them cover out-of-pocket costs — more profitable for insurers.
"This dynamic leads to overpricing of non-silver products," the authors note, "because risk adjustment results in unjustified transfers from those plans or simply carriers not offering these products so that they can better compete for the profitable enrollment segment."
To counteract this dynamic, the authors propose altering the risk-adjustment program's methodology in order to "capture cost differences among plans that are not reflected in allowable rating factors."
This admittedly technical fix could go a long way toward improving the variety and value of exchange plans.
Perhaps the study's most promising reform, though, concerns individual coverage health reimbursement arrangements, or ICHRAs. In lieu of employer-sponsored coverage, these arrangements allow companies to provide workers with a fixed amount of money with which to purchase individual health plans on the exchanges.
By giving employers greater freedom to offer ICHRAs, the Paragon authors argue, policymakers could vastly expand the size of the individual market. This, in turn, would spread risk across a larger pool of exchange consumers — and enable insurers to lower premiums, improve cost-sharing, and perhaps even broaden their provider networks.
These reforms may seem technical. But they are also examples of what could be possible if Democrats stopped blindly defending the Affordable Care Act as an unalloyed success — and started looking for ways to actually make health coverage more affordable.
Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is "False Premise, False Promise: The Disastrous Reality of Medicare for All," (Encounter Books 2020). Follow her on Twitter @sallypipes. Read Sally Pipes' Reports — More Here.