According to critics on the left, the Patient Protection and Affordable Care Act (PPACA) doesn’t do enough when it comes to universal health care. According to critics on the right, the PPACA is a breach of governmental power. And, according to insurers, the problem with the PPACA is more straightforward: It’s unsustainable.
More specifically, it’s unsustainable because it isn’t profitable.
Just last year, UnitedHealthcare, the largest private insurer in the U.S., issued warnings that it would no longer offer plans in insurance exchanges should the PPACA remain unprofitable. And to be sure, the company pulled participation in Georgia and Arkansas already. This follows the continuing trend where claims continue to exceed premiums, putting a strain on many companies.
But, is the PPACA really unsustainable? And for that matter, what would it mean for the future of the Act?
Insurer Dropouts Aren’t the Only Potential Outcome to the Profitability Problem
While insurers leaving the marketplace remain a major threat, it isn’t the only threat. After all, there’s one more resolution insurers can turn to, one of which is to raise premiums to force profitability.
The main reason for this problem is simple: Older, unhealthy people have disproportionately taken advantage of the PPACA. One reason younger, healthier people tend to stray from the Act is because they remain on their parent’s plan until they turn 26, as they are allowed to do. Others simply can’t afford care because the cost is still too high.
The Government Response to the Threat of Withdrawal
So, what has the government done with threats of withdrawal? The Obama Administration has raised penalties for those who still go without insurance with an average fine of $695 for this year alone.
Insurers have put pressure on the administration to be more strict in their enforcement of enrollment rules because individuals were simply waiting until they were ill or needed care to join plans. However, the administration insists they have done so and have put all necessary implements in place to keep the marketplace stable.
Though it had continued to grow, it has stagnated more recently.
The Question Remains: Is the PPACA Unsustainable?
In short, it seems unclear whether the PPACA is unsustainable. Conflicting reports from the Obama Administration and healthcare giants make it confusing as to whether there is a problem looming on the horizon. But with the upcoming 2016 presidential election, change may be inevitable.
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What do you think: Is the PPACA unsustainable? What changes should be made to make it more sustainable? Share your thoughts in the comments below!