Congress has once again tried and failed to reform our healthcare system. With lawmakers on recess and the Trump administration considering next steps on healthcare reform, one aspect of healthcare continues unabated: higher and higher annual health insurance premium increases.
According to new data released by the U.S. Department of Health and Human Services (HHS), Americans face yet another year of double-digit premium increases. Health insurance companies in Idaho, Iowa, South Carolina and West Virginia seek to hike their premium rates 30 percent or more. Insurers in New Hampshire requested a 44 percent rate increase, and Ohio insurers plan to raise premiums by an average of 20 percent. In Maryland, BlueCross Blue Shield requested an increase of a whopping 50 percent.
Those sort of high annual premium increases have become the norm since the Affordable Care Act (ACA) – Obamacare – was implemented.
Meanwhile, several major insurers—including Aetna and Humana—announced plans to leave the ACA exchanges entirely in 2018. Other insurers have been drastically reducing their participation. The New York Times recently estimated that more than three million Americans might have only a single provider from which to choose, and consumers in 45 different counties could have no insurer at all. The numbers make it clear that the insurance companies are winning and the American people are losing.
It could get worse. Several states have yet to announce rate requests, and final increases won’t become public until closer to November when open enrollment is slated to begin.
But Americans have been down this road before. Final rates may be unclear, but most will be paying more for their health insurance this year than last.
Insurance companies legitimately blame instability in the ACA exchanges for premium increases, which may be true, although to some extent they have themselves to blame for helping design the ACA to ensure government subsidies would protect their profit margins. By now it’s obvious that critics of increased government involvement in healthcare were right. Government subsidies not only distort the market, they decrease competition and fail to incentivize insurance companies to lower healthcare costs.
In the seven years since the ACA was introduced, President Obama’s namesake law has failed to uphold several of its key tenets, most notably its promise to make healthcare affordable. While Americans continue to struggle to pay for coverage, health insurance companies have made excuses time and again for why their rates must continue to rise.
The failure of the ACA to avoid rising premiums and coverage costs was predictable. The government hasn’t figured out how to make healthcare affordable to main street Americans because government is part of the problem, not the solution. To reign in healthcare costs—including insurance premiums—we need free market reforms that encourage competition.
Competition, not more government control, will help drive down costs.
The future of the ACA remains unclear. Congress has failed to repeal or replace it, but may try again. President Trump and HHS Secretary Price have made healthcare reform a priority and are considering executive action. In the meantime, main street Americans struggle with ever higher insurance premiums, deductibles and out-of-pocket costs.
And that problem will persist unless and until Congress wakes up to the reality that it must look to the free market, not government regulation, for solutions.
Timothy Lee is Senior Vice President of Legal and Public Affairs for the Center for Individual Freedom (www.cfif.org).