Friday, May 20, 2016

Political Choices Made To Goose Obamacare Are Now Wrecking It

Health plans are seeking double digit rate increases for their 2017 Obamacare plans, marking the third consecutive year that prices will rise in the exchanges.
This week, health plans in New York proposed a 17.3% average rate hike. It’s in line with similar requests made in other states. Michigan reports an average proposed rate increase of 25%, Oregon 20%, Virginia 18% and Maine 17%.
There are many structural flaws plaguing the way that the Affordable Care Act tilts the rules in favor of costlier and less efficient markets. There are plenty of gratuitous steps taken by regulators, who interpreted the prescriptive law in ways that made it even costlier.
But perhaps no regulatory tradeoff was more damaging than the political tension between boosting enrollment and making the market for ACA health plans more self-sustaining and price-competitive. At every turn, regulators favored enrollment gains over sound management. That has come at a big cost in how the plans are now priced.
The policy mistakes have compounded Obamacare’s woes. Fixing them will require more than regulatory tweaking. It will compel the Obama team to adopt a new political ethic when it comes to the tension between access, affordability and the obligations they’re willing to place on consumers. The Obama team can tilt the rules to let people flow in and out of the Obamacare exchanges at will. But this gaming will drive up costs for everyone.

http://www.forbes.com/sites/scottgottlieb/2016/05/20/the-political-choices-made-to-goose-obamacare-are-now-wrecking-it/#48dd6b366184 

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