The reality of the health insurance marketplace

Editor’s Note: Sylvia Burwell is the Health and Human Services secretary. The views expressed are her own.

It’s become a yearly ritual: As the Affordable Care Act (ACA) continues to settle into place, inevitable growing pains get portrayed by critics as doom for health reform. This year, we’re seeing it again.

Many of these claims are detached from the facts, and blind to what health care was like before the ACA was passed. But that doesn’t mean there aren’t issues and room for improvement.

It’s important to start with the context.

Thanks in part to the ACA’s reforms, premiums for the 150 million Americans with employer coverage have grown more slowly than before the law passed, saving families thousands of dollars. All privately-insured Americans can get free preventive services and keep their kids on their plans until they turn 26. And the law has contributed to a sharp drop in preventable patient deaths in hospitals.

Twenty million people have health insurance today thanks to the ACA, and the uninsured rate in this country is the lowest on record. Plus, more than 10 million Americans now have coverage through the ACA’s Marketplace. These consumers report that they’re pleased with their coverage and can now access and afford the care they need.

But we do expect 2017 to be a transition year for the Marketplace.

One reason is that some Marketplace issuers initially priced their plans below the cost of new enrollees, and now they need to catch up. Under the ACA, people can no longer be denied coverage because they’ve been sick – an important change for up to 129 million Americans with conditions like asthma, diabetes, or heart disease. But because the individual market previously operated by excluding sick people, no one knew how much it would cost to start covering everyone.

Another factor is the end of some of the ACA’s programs designed to support this new market in its early years. This will also have a one-time impact on costs.

Overall, independent experts calculate that Marketplace premiums are currently 12% to 20% lower than the Congressional Budget Office predicted when the ACA was passed. Even with this year’s proposed rate changes, consumers will likely pay less next year than they would have if rates had come in and grown as CBO predicted.

Nonetheless, we know that premium increases are a challenge for families. Fortunately, as the market adjusts, the Marketplace has built-in protections for consumers that insulate most from large rate increases. Even if premiums for every single plan rose substantially next year, the vast majority of HealthCare.gov consumers could still choose a plan for less than $75 per month, thanks to financial assistance and the ability to shop for affordable options.

In most places and for most people, the Marketplace is working well, and I expect it will continue to grow in the years ahead. But the administration, insurers, states, and Congress all have a role to play in making it work even better, informed by the past three years of experience.

Here at the Department of Health and Human Services, we are using all tools at our disposal to strengthen the Marketplace and help more people access coverage. For example, we are making improvements to the Marketplace’s risk-sharing mechanisms and eligibility rules. We are also planning a data-driven outreach campaign to get more healthy and young enrollees in this upcoming 2017 Open Enrollment. We’re also working to improve affordability and quality for all consumers, wherever they get their coverage, by rewarding health care providers for the quality of care they provide, not the quantity.

Insurers, for their part, can continue to adapt to an individual market that looks very different than it did a few short years ago. Before the ACA, issuers competed to enroll the healthiest people; today, they compete based on cost and quality in a transparent Marketplace. Some issuers are already succeeding in this new market, which requires a different approach, including more emphasis on care coordination and quality improvement to meet the needs of consumers.

States also have a role to play. We know that expanding Medicaid not only helps low-income people gain access to care, but helps reduce Marketplace premiums for middle-income families. And, states that have rolled up their sleeves to help run the Marketplace tend to have higher enrollment and more affordable premiums.

Of course, Congress can help as well. As President Obama noted in JAMA several months ago, Congress could improve the affordability of Marketplace coverage by increasing financial assistance, decreasing prescription drug costs, and introducing a public option in places with limited competition. Unfortunately, opponents of the law have spent years chipping away at funding for everything from CO-OPs to programs that help stabilize premiums to outreach efforts that help uninsured Americans find coverage. These actions make coverage less available and less affordable for consumers.

We can and should have a serious conversation about improvements to the law. But the debate around the ACA should be about how – not whether – to make health care better. We welcome every idea that can advance that goal, but, for the sake of those Americans who are covered and otherwise helped by the law, we should recognize it is here to stay. It’s up to all of us to work together to further improve health care in America.