Have you observed what is happening with medical insurance in the United States? There is an upheaval taking place. You might be experiencing it yourself.
The Wakely Consulting Group has taken upon itself to track trends in the medical insurance market, both pricing and participation.
Their latest report has documented an ongoing and profound shift, one so dramatic that it portends something truly meaningful for the future.
Lacking serious reform of the system from Congress, it seems that consumers are taking matters into their own hands.
Congress declined to extend subsidies for the Affordable Care Act (ACA) starting in January. Consumers have examined their bills and plans in light of the price increases which range from 25 to 115 percent depending on conditions and levels. More than a million people have dropped their coverage entirely. More will do so through the end of the year.
Wakely comments: “Based on unique data collection from 80 percent of the ACA individual market, Wakely … estimates a material reduction in enrollment for 2026, ranging on average from 17 percent to 26 percent in total.”
This is happening because, fortunately, there is no individual mandate to be enrolled in anything since the Supreme Court deleted that portion of the program.
Individuals are downgrading their coverage to plans with fewer benefits and higher deductibles. Or they are just doing without and paying cash or shopping for crowdhealth options.
The implications for the ACA, also known as Obamacare, are profound.
First, this changes the risk pool calculation in ways that are disruptive. The whole machinery fundamentally depends on large risk pools that mask costs and separate premiums from actual individual circumstance. With such large pools, the architects hoped to take a sideways route to a privatized form of socialized medicine.
That scheme now lies in tatters.
Second, with so many people leaving (obviously those who don’t anticipate system needs) those who remain in the system are less healthy: the very people more willing to pay the higher premiums are those who expect to use the services. From an actuarial point of view, this change puts further pressure on prices. And with risk pools shrinking and data pointing to higher costs, we have a system that seems to be eating itself on both ends.
You would think that the implosion of the medical-care system of the world’s biggest economy would be big news. Somehow it is not. Why has this not been widely reported?
A theory as to why: It is happening too slowly and with too much data diffusion. It is genuinely difficult to get a handle on the pace of the increases because every state is different, every age group is priced differently, and the diversity of real-world experience not only differs on the household level but even on the event level.
Which is to say, you never know until it hits you precisely what you will pay given any particular medical-care event. As for the premiums and deductibles, people are remarkably unwilling to share personal stories of what they face due to privacy concerns and also some element of personal shame related to financial burdens.
The system as it stands is so enormously complicated that hardly anyone can really understand the whole, much less characterize the aggregate experience with the sector. It keeps growing larger, more expensive, and more exploitative, but also more complicated and diffuse, leaving writers like me ever less willing to make a judgment on it.
Hellbound and Down 