Peter Lee, executive director of Covered California, discusses the challenges and opportunities in the ACA insurance marketplace at the 2016 Seidman Lecture. Image: Tony Rinaldo
Premiums for marketplace plans in the Affordable Care Act will increase by an average of 25 percent nationwide from 2016 to 2017, new reports from the federal government say.
Opponents of the politically contested health care reform law, sometimes referred to as Obamacare, have reacted by saying that the latest increases are proof that the ACA is a failure.
But some states are saying that the law has proven successful.
Peter Lee, executive director of Covered California, the California ACA insurance marketplace, said that states that have taken advantage of all of the tools provided by the ACA, such as California, have been able to make great progress in providing affordable care for consumers.
Lee was the featured speaker at this year’s 16th Annual Marshall J. Seidman Lecture on Oct. 25.
“We keep hearing a lot about the exchanges failing,” Joseph Newhouse, HMS professor of health care policy, said. “But our speaker may be able to tell you, ‘It ain’t necessarily so.’”
California has had the best performance in the health exchanges of any state on many measures.
“We're at a pretty good time to pause and look at how the ACA and the exchanges are doing,” Lee said. “With any large-scale policy, at five or six years in you need to pause and do a tune-up.”
From 2013 to 2015 the share of California residents without health insurance fell from 17 percent to 8.1 percent, according to federal calculations.
Covered California’s data show that most people who have left their plans either entered an employer-provided plan or became eligible for Medicaid, with very few leaving to become uninsured.
One reason that California has had such success is that the state started with the healthiest mix of residents of any state. The state government also wholeheartedly embraced the provisions of the ACA, Lee said.
Step one was to increase participation in Medicare, Lee said. This move served both to increase the portion of the population with health care coverage and to decrease the number of unhealthy people in the population who would be eligible for exchange-based individual insurance.
Covered California also actively sought to market and sell its insurance plans, which allowed the program to reach healthier consumers who might not have sought out insurance on their own, Lee said.
“Many of the exchanges that are struggling are in states that have been politically hostile to the ACA," Lee said.
In states that did not increase Medicare participation or invest in marketing the exchange plans, Lee said, many of the consumers who sought to purchase plans were already in poor health and therefore expensive to cover.
On average, exchange plan premiums in California will rise 13 percent in the new year, compared to states like Arizona, where rates will more than double, Lee said.
In contrast to some states, where insurers have lost money and struggled to set sustainable prices, leaving both consumers and health plans unhappy, Lee noted that insurers are eager to participate in the California exchange because they can sell products that make a profit.
Covered California is using that as leverage to require improved benefits for consumers and to prune low-quality and high-cost hospitals and provider groups from insurers’ networks, Lee said.
“We can push changes in the delivery system to improve the quality of care," he added.
Noting that much of the research that guided the design and implementation of the ACA came from HMS and colleagues throughout Harvard University, Lee said that researchers have an important role to play in evaluating the reform effort and guiding improvements in the future.
“Credit and blame lies on your doorstep,” Lee said, challenging researchers in the audience to “help the new Congress and the new president build on what we've got, which is actually working pretty well."
In 2000, on the occasion of the 50th reunion of his Harvard Law School class, Marshall J. Seidman provided endowment support to the Harvard Medical School Department of Health Care Policy to support research related to health care costs and quality and to host an annual meeting by a leading policymaker on issues related to costs and quality of health care with a particular emphasis on activities that are most likely to impact federal and state approaches to these problems. The department has sponsored the lectures yearly since 2001.
