PA's Unaffordable Care Act Premiums

If there’s ever a contest for least accurately named law, the Affordable Care Act (ACA) would certainly be in the running. In the aftermath of the ACA, more commonly called Obamacare, health care costs have skyrocketed in Pennsylvania and throughout the country.

The Department of Health and Human Services recently released a study highlighting the change in individual exchanges premiums from 2013 to 2017. The results aren’t pretty. Nationwide, individual monthly premiums increased 105%. In Pennsylvania, individual monthly premiums jumped from an average of $242 in 2013 to $533 in 2017 – a 120% increase. In three states the increase was more than 200%!

Increasing mandates and decreasing choice is a recipe for higher costs and less satisfaction. But relatively simple changes could lower premiums by fostering competition and choice.

The key to making health care more affordable is to treat health insurance as insurance. People don’t expect their car insurance to cover oil changes. Insurance is meant to protect you from big expenses, not to cover routine costs.

How do we apply this model to health insurance? High-deductible plans paired with larger Health Savings Accounts (HSAs) for regular expenses. The high-deductible plan will protect people in the event of major medical expenses, while HSAs can be expanded to pay for premiums, over-the-counter medications, and even direct care provider memberships.

This set up empowers consumers. By eliminating the third-party payer for most health care expenses, people are more likely to seek out high quality care at an affordable price.

Reducing mandates would also empower consumers. For example, individuals should be able to decide if they want their health insurance to cover maternity care, substance abuse or prescription drugs.

In Pennsylvania, individual monthly premiums jumped from an average of $242 in 2013 to $533 in 2017.

 

Until lawmakers give more power to health care consumers, exchange premiums will continue to rise. In fact, last week Pennsylvania announced 2018 premiums will increase an average of 8.8% for individuals. That’s on top of last year’s 32% increase and increases every year since the exchanges launched.

Rhetorically, the Affordable Care Act focused on the right problem, rising health care costs, but its government-heavy solutions only made the problem worse. It’s time to reverse course.