Opinion: Obamacare’s ‘Failure’ in North Carolina

Why health insurance has reached a crisis point in the Tar Heel State

It’s been a few weeks since Aetna decided to withdraw from the federal health insurance marketplace in North Carolina, a decision made for questionable reasons and with hard consequences for hundreds of thousands of North Carolinians, including me.

It’s frustrating enough to consider the possibility of one insurance carrier, Blue Cross Blue Shield, on the federal exchange, or none at all. It’s almost as frustrating to witness the coverage of Aetna’s (and UnitedHealthcare’s) exits focus on effects and only slightly on causes, as if the impending “failure” of the Affordable Care Act in this state is the result of natural market churn that the law’s architects failed to foresee.

Yesterday, the CEO of BCBS North Carolina told a breakfast crowd at Carmel Country Club that the insurer will decide by Sept. 23 whether it would pull out, too. Brad Wilson said former UHC and Aetna customers will sign up for BCBS plans when open enrollment for 2017 begins Nov. 1, and the company doesn’t have enough time to hire and train customer service staff by then to meet the extra demand.

If Blue Cross withdraws from the federal marketplace, an estimated 600,000 to 700,000 people who buy insurance on the federal marketplace will be flat out of luck. “It’s clear something’s wrong,” Wilson said. “Something’s not working right.”

No kidding. The ACA is failing in North Carolina because the General Assembly, in conjunction with Congress, wanted it to fail and acted to guarantee it would.

The Los Angeles Times recently took a broad view of the ACA’s woes in North Carolina and other states, summarizing the issue this way:

As insurers exit Obamacare marketplaces across the country, critics of the Affordable Care Act have redoubled claims that the health law isn’t working.

Yet these same critics, many of them Republican politicians in red states, took steps over the last several years to undermine the 2010 law and fuel the current turmoil in their insurance markets.

Among other things, they blocked expansion of Medicaid coverage for the poor, erected barriers to enrollment and refused to move health plans into the Obamacare marketplaces, a key step to bringing in healthier consumers.

Those decisions left the marketplaces in many red states with poorer, sicker customers than they otherwise might have had.

Now, consumers are paying the price, as insurers seek major rate hikes or stop selling plans altogether.

Indeed, eight of the nine states where consumer choices will be most limited in 2017 have rejected Medicaid expansion and taken other steps that have weakened their marketplaces, data show.

“It’s the same basic lesson I tell my kids,” said Manatt Health managing director Joel Ario, a former insurance commissioner in Oregon and Pennsylvania. “If you put the work into something, you will get results. If you just sit on the sidelines and complain, you shouldn’t be surprised if things don’t work out.”

That second paragraph above, the one that starts with “yet”? Replace it with “that’s because,” and you have a better picture of what’s happening. The legislature refused to expand Medicaid or create a state exchange, rejecting $74 million in federal money specifically intended to cover high-risk patients under Medicaid and prevent private insurers from having to absorb the extra cost of coverage. Private insurers like Aetna, UHC, and Blue Cross ended up having to cover thousands of older, sicker people that otherwise would have been covered by an expanded Medicaid. So they’re losing money.

This basic fact is buried deep in this morning’s Observer story:

[Wilson] supports expansion of Medicaid to cover more than 500,000 low-income residents who don’t qualify for subsidies that would make insurance affordable on the ACA marketplace. North Carolina is one of 19 states that have declined to accept federal money to expand Medicaid as part of the ACA.

“The fact that they are not covered by Medicaid is not a cost-saving mechanism,” Wilson said …

Again, no kidding. It’s not like officials in the know didn’t see this precise crisis coming. State Insurance Commissioner Wayne Goodwin was burned this year by a misleading N&O headline and story that made it appear that he blamed the ACA for the pressure on private health insurers in the state. He had to write in and stress that, no, the law isn’t the problem—it’s the General Assembly’s refusal to work with it:

I have consistently supported the ACA. Because of it, insurers can no longer turn away our sickest men, women and children. Families have access to potentially life-saving preventive care. Hundreds of thousands of North Carolinians have enrolled in ACA plans – for some, it’s the first time they’ve had health insurance. These were positive and much-needed reforms.

But I will not shy away from pointing out problems that need fixing. Our state’s failures to expand Medicaid and to create a state-controlled insurance exchange have consequences. As health insurers merge and consolidate, withdraw from our market and reduce the areas in which they offer plans, North Carolinians are left with fewer choices and less access to health care coverage. Having fewer insurers could jeopardize the progress we’ve made in reducing the number of uninsured people.

That was back in February. Now we’re looking at one insurer on the exchange, or none, and customers by the tens or hundreds of thousands having to drop health insurance or pay insanely elevated premiums for it, which I thought was the nightmare scenario that the Republican opponents of Obamacare said the law would create, which in a way I guess it did. So perverse congratulations to them for orchestrating the disaster they predicted. But a whole lot of us will suffer for this, and we should remember another key point: Don’t bother waiting for a workable alternative to the ACA, because more than six years after its passage, no one has come up with one.