How is the Affordable Care Act Doing, as UnitedHealth Heads for the Exits: Editorial

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The Affordable Care Act’s detractors seemed to get a comforting piece of new evidence last April when UnitedHealth Group Inc. (Minnetonka MN), the country’s largest health insurer, announced it would pull out of many ACA markets next year.

Then in May, California health officials became the latest to say UnitedHealth was leaving, when a spokesman for the Covered California exchange confirmed that the insurer wouldn’t participate in 2017.

UnitedHealth had about 1,200 Covered California enrollees, the spokesman said. UnitedHealth told brokers that it has filed paperwork to offer plans in just six states’ health-law marketplaces next year, providing the most complete picture so far of its previously announced widespread withdrawal.

In a posting on a private website it maintains for brokers, UnitedHealth said “at this time, we have filed to offer On-Exchange products” in Nevada, New York and Virginia for 2017.

But rather than serve as the hoped for death knell the GOP desperately envisions for the ACA, in fact the news is not all that shocking, and more importantly, it is not a sign that the law is failing.

Though UnitedHealth is the country’s largest health insurer, it is not a dominant player in the marketplaces that the ACA set up for individual insurance buyers. It covers only about 6?% of 12.7 million marketplace participants, according to the Washington Post.

Simply put, United does not appear to have been very effective at competing to attract customers. An Urban Institute study found that United’s premiums tend to be higher than competitors’, perhaps because its plans offer wide networks of doctors, hospitals and other providers to choose from, which is expensive.

Unsurprisingly, marketplace insurance buyers tend to pick lower-cost options. The Kaiser Family Foundation (Menlo Park CA) concluded that even if United stopped participating in all ACA marketplaces, premiums would go up about 1% overall.

United’s selective exit from ACA marketplaces appears to reflect two positive features of the law, the Post points out.

  1. First, Obamacare was meant to spur competition among insurance companies, thus constraining premiums; in many markets, this dynamic appears to be at work, to the detriment of United.
  2. Second, the law has inhibited many of the ways that insurers used to contain their costs, such as refusing to cover certain people or certain treatments, or boosting premiums for older customers.

Many insurers on the ACA marketplaces have responded by offering plans that keep costs down by narrowing their networks of providers. This is a better way to contain costs than those the law forbids, says the Post.

Still, United’s exit could reduce competition in some smaller markets with fewer participants. Moreover, there is evidence that other insurers are also finding it hard to make a profit in certain ACA markets.

The danger is not that the markets will fall apart, but that customers might continue to face some premium volatility as insurers raise prices to keep their balance sheets in order. The biggest issue may be that ACA marketplaces have simply taken longer than expected to develop, the Post continues.

National enrollment is well below what the Congressional Budget Office predicted around the time the law passed, in large part because many more people than expected continued to receive insurance coverage from their employers.

Another factor is that some people kept their old plans rather than joining the new system. This is one reason to think that enrollment will continue to rise; it will just take longer than originally projected.

Steve’s Take: The Affordable Care Act is now six years old and some open-minded and apolitical people want to know whether the ACA is “succeeding.” Like Charles Gaba, editor of, I’d like to know “if Obamacare is making people, you know, healthier.”

Ezekiel J Emanuel, MD, PhD, penned an exceptional piece evaluating the health of the ACA for the April 5, 2016 issue of the Journal of the American Medical Association (JAMA. 2016;315(13):1331-1332. doi:10.1001/jama.2016.2556).

Dr. Emanuel notes that the first few years of implementation were “very poor.” At launch, the website was a disaster, failing to allow “window shopping” for plans and premiums without registering and unable to handle the volume of shoppers.

The site has improved but still is not equivalent in ease of use and functionality with the best e-commerce sites. At present, however, on many relevant metrics, Doctor Emanuel concludes that the ACA has performed well, “fueling major progress.”

On access, according to a Gallup poll, the rate of insurance declined from 17% in 2013 just before opening of the exchanges and expansion of Medicaid to less than 12% today. About 17 million previously uninsured people now have health coverage because of the various provisions of the ACA.

In addition, according to one report, if all states had expanded Medicaid, an estimated 21.3 million uninsured U.S. residents would’ve had health insurance.

Second, on cost, Emanuel points out that the ACA has helped keep healthcare inflation modest. According to the Health and Human Services Actuary, the five years between 2009 and 2013 had “historically low [healthcare cost] growth, which averaged 3.7%.

Even in 2014–the last year for which reliable data are available–the per-person expenditure growth has been low–3.2% for private health insurance, 2.4% for Medicare, and -2.0% for Medicaid.

The ACA has also been less expensive to implement than predicted, which has helped lower the federal deficits. Contrary to the assertions of some industry observers, the ACA has not inhibited employment expansion.

Despite repeated claims, mostly from the GOP camp, that the ACA will adversely affect employment, the economy continues to expand, adding 14 million jobs since the end of the recession in 2010.

Also importantly, the ACA has helped support–not inhibited–medical innovation. One measure of innovation is venture capital investments in new start-ups. According to one report, in 2015, “total medical investment [reached] a new peak of $16.1 billion. Specifically, venture capital investment in biotechnology was nearly $9 billion–more than twice what it was in 2010.

Finally, on delivery system reform, Emanuel notes that the ACA created a framework for necessary payment change to transfer the focus of the healthcare system to keeping patients healthy. The recent establishment of a target and “glide path” for moving to alternative payment models is a critical step to give new companies in the health system assurance that change will occur.

So going back to my and Charles Gaba’s query, New York Times reporter Margot Sanger-Katz posits: “Obamacare has provided health insurance to some 20 million people. But are they any better off?”

She then points to recent studies suggesting that people have become less likely to have medical debt or to postpone care because of cost. They are also more likely to have a regular doctor and be getting preventive health services like vaccines and cancer screenings.

A new study, just published online in JAMA Internal Medicine, offers another way of looking at the issue. Sanger-Katz explains low-income people in Arkansas and Kentucky, which expanded Medicaid insurance to everyone below a certain income threshold, appear to be healthier than their peers in Texas, which did not expand.

Their survey found people in Arkansas and Kentucky were nearly 5% more likely than their peers in Texas to say they were in excellent health in 2015. And that difference was larger than it had been the year before. Extensive research shows that people who say they are in poor health really are much more likely to die than those who describe their health as good.

I wholeheartedly agree with Gaba that the national debate that should be going on (But isn’t) from a “human” perspective is about whether more or fewer people are better or worse off health-wise and economically thanks to/due to the ACA, than they would otherwise be without it.

From my admittedly “left-leaning centrist” view of the state of the U.S. healthcare delivery system, I believe that there is a strong case that can be made that the ACA is succeeding in its stated objectives. Now, the more important question is how will it do in the future.

A strong case can be made that #Obamacare is succeeding in its stated objectives. Click To Tweet

The ACA’s authors expected that there would be some volatility as markets found their footing, so they built some temporary stabilization mechanisms into the law. The logical response to the current state of the Obamacare health system would be keeping those mechanisms around a while longer.

But many observers stopped expecting logic regarding the ACA from Congress years ago. Just consider: the tally of GOP attempts to repeal or defund Obamacare stands at 62. And if Mr. Trump assumes the Oval Office in January, his healthcare program at present is a bit short on specifics.

On CNN, Trump outlined his detailed plans for getting rid of Obamacare: “It’s gotta go…[I’ll] repeal and replace it with something terrific.” Should be interesting to find out just what, exactly, he means by that.

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