Premium growth in the coming years under the Patient Protection and Affordable Care Act will be forced out of the private health insurance market, increasing the number of uninsured Americans, Stephen Parente, PhD, has written in an opinion piece in The Wall Street Journal.
Here are five things to know about the argument made by Dr. Parente, who is associate dean of the Carlson School of Management and director of the Medical Industry Leadership Institute at the University of Minnesota.
1. Based on a study he conducted with Michael Ramlet, an adjunct professor at University of Minnesota, of health insurance exchange enrollment data and a micro-simulation model partly funded by HHS, Dr. Parente projects the average premium for a silver-level individual exchange plan will go up by $1,375 by 2019, and the family premium for the same plan will go up $4,198.
2. According to Dr. Parente, this spike in premiums and increase in the uninsured population will occur after 2017 partly because the reinsurance and risk corridor programs included in the PPACA to serve as a financial cushion for insurance companies will expire in 2017, ending the "taxpayer bailouts" for insurers that lose money through the exchanges, Dr. Parente wrote.
3. Additionally, the PPACA will require all health plans, including those currently exempt for hardship and other reasons, to provide certain essential benefits. That means as many as 60 percent of the health plans sold in 2013 wouldn't meet PPACA requirements in 2017, according to Dr. Parente.
4. Furthermore, an increasing number of employers will likely stop providing health insurance and send their workers to the exchanges instead. Although employers face a penalty for taking this course of action, Dr. Parente wrote the penalty will probably cost less than providing health benefits.
5. Those left without insurance because their plans are dropped for not meeting PPACA requirements, their employers stop offering insurance or they choose not to pay the high exchange plan premiums will have Medicaid left as their only option for coverage, according to Dr. Parente. Many won't be eligible and will therefore choose to stay uninsured and pay penalties under the individual mandate. Overall, Dr. Parente predicts there will be more than 40 million uninsured people in the U.S. by 2024, a 10 percent increase compared with today. According to the Kaiser Family Foundation, before the PPACA's major coverage provisions took effect, 47 million Americans were uninsured. In a report released last week, the Congressional Budget Office predicted 30 million will remain uninsured in 2016.
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