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OBAMACARE'S STRUGGLES: RISING PREMIUMS AND LIMITED OFFERING

By: Nicola Heredia, CHS Marketing Coordinator

Open enrollment period for Obamacare is approaching, and in preparation, marketplace insurers have been required to release their pricing for 2017. Across the nation, Americans will be hit with soaring prices and fewer plan options to pick from.

The rate of increase varies from state to state. Phoenix, Arizona tops the list with a 145 percent premium hike, while Providence, Rhode Island has kept the increase seemingly conservative at 14 percent.

“We’ve certainly seen pretty significant premium increases this year, as many [insurance] carriers exit or significantly scale back participation,” said Elizabeth Carpenter, senior vice president of the Avalere Health Consultancy, in a NBC news article. “Certainly, if you aren’t getting a tax credit subsidy in the individual market, you are likely to face significant premium increases, depending on where you live.”

Carpenter estimates that approximately 1 million of the almost 12 million marketplace participants will be forced to change insurance plans because their current insurer is opting out of the exchanges. Other Americans will need to look at remaining options to see what is the best coverage that they can afford.

Shopping around and ultimately changing insurance plans may result in a cost savings, but it also has other implications. Depending on the plan selected, the network of hospitals and providers can drastically change, forcing individuals to transfer health care records and start from square one with a new provider. This may not be as impactful for healthy individuals who visit their physician once a year, but those with chronic diseases that require specialists to monitor their health will be greatly affected.

Obama’s administration has tried to combat criticism about the rising out-of-pocket costs, by arguing that the millions of Americans that receive subsidies will not feel the financial burden as much. The goal is that low income individuals are paying less than $100 a month after tax credits and subsidies are factored in.

The obstacle arises in how to make individuals aware that government funding is available to make out-of-pocket costs less.

“It’s been a harder effort to find people who are probably eligible for [financial] help but don’t come forward for whatever reason,” said Karen Pollitz, senior fellow of the Kaiser Family Foundation, in a NBC article. “Some people don’t have the Internet, they don’t speak English, they don’t read the Federal Register. I think the challenge continues.”

Although the Obama administration has tried to minimalize the impact the public will feel in 2017 with these new price hikes, experts believe that the increase in out-of-pocket costs are a red flag that the initiative is failing.

With reduced choices and increased expenses, the exchanges have failed to become the competitive marketplace that was originally envisioned. According to a New York Times article, economists and health policy experts believe that the rising premiums are cause for concern:

  • Increase in subsidies and tax breaks for low income Americans results in high taxes to afford these financial breaks.
  • Those purchasing insurance without subsidies will no longer be able to afford the marketplace plans due to the high premiums.
  • Premium hike shows that insurance companies are feeling the burden of paying for care so many are pulling out of the exchanges or increasing their prices in order to survive.

“You should be concerned anytime prices go up rapidly,” said Robert D. Reischauer, a former director of the Congressional Budget Office, in a New York Times article. “This is increasing costs to the government.”

The Congressional Budget Office estimates that federal costs to cover subsidies will total $43 billion in 2016 rising to over $672 billion within the next ten years. These are hefty figures that must be considered when analyzing the success and failures of Obamacare to determine what the future looks like for health care in the U.S.

Open enrollment lasts through January 31. Obamacare may be here to stay for another year, but fixing the system or getting rid of it completely will be in the hands of the next president.

PRESCRIPTION PRICES SOAR, CONTINUING TO INCREASE OUT-OF-POCKET COSTS

By: Nicola Heredia, CHS Marketing Coordinator

Not only do Americans have to be concerned with rising premiums and higher deductibles, but the increasing cost of prescription drugs is continuing to take a toll on budgets across the country. Within the last three years alone, individuals have had to pay an average of 30 percent more for their prescriptions, according to a Wall Street Journal report.

“It’s easy to talk about the cost today, the cost to the plan, the cost to the premium – but we also have to look at the cost to society, when people are losing their jobs and having to shift to government programs for support,” Annalise Dolph, National Multiple Sclerosis Society senior directory of advocacy said in a Lund Report article.

The Centers for Disease Control, CDC, estimates that approximately half of Americans have taken at least one prescription drug within the last month. One in five Americans are estimated to utilize three or more medications monthly.

“People assume that their insurance card is their golden ticket to good prices, but that’s not always true, and we’re not allowed to tell them,” said a central Ohio pharmacist, in a Dispatch.com article.

The recent EpiPen controversy has highlighted the lack of regulation when it comes to prescription costs. The Fair Accountability and Innovative Research (FAIR) Drug Pricing Act is a piece of legislation that many believe is the first step to holding pharmaceutical companies accountable for their pricing.

The act would require manufacturers to provide more details to explain the reasoning behind price increases, include their costs and research to back it up. The need for the U.S. government to get more involved is apparent, even if it is met with pushback and criticism.

“Drug corporations are sticking it to American taxpayers with soaring prescription drug prices,” said Sen. Tammy Baldwin (D-WI), one of the bill's sponsors. “This bipartisan reform will require transparency and accountability for drug corporations who are jacking up costs for families in need of affordable lifesaving treatments.

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