3 ways to prevent an ACA death spiral

Document titled "Patient Protection and Affordable Care Act"

Concerns that the Affordable Care Act exchanges are in a slow death spiral are gaining traction after three major insurers announced plans to pull out, but state exchanges could be revived with better cost control, regulatory support, and a little help from Congress.

In an op-ed published on FiveThirtyEight, Tim Mullaney identified three ways that ACA exchanges can rebound from a slew of insurers backing out of the exchanges:

  • Better cost control: Several insurers, like Centene and Molina Healthcare are turning a profit on exchange plans by controlling administrative costs, selling plans through Healthcare.gov rather than brokers, and cutting back on executive salaries. Narrow networks have helped insurers limit costs associated with high-priced providers.
  • Stronger enforcement: With stronger enforcement of financial penalties tied to the law’s individual mandate, regulators could help push healthier members into the exchange, providing stability for insurers. Reining in the cost of drugs could also provide a short term fix for growing medical costs.
  • Increasing subsidies: Offering better subsidies for exchange plans, which would attract a healthier group of patients, requires Congressional action. Mullaney points out Congress previously raised reimbursements for Medicare and Medicare Part D, offering stability during tumultuous moments in each program’s history.

Earlier this week, President Barack Obama laid out his plan to fix ACA exchanges that emphasized the need to move healthier patients into exchange plans, which was met with skepticism by some experts. FierceHealthPayer previously reported that health executives and states are looking to Congress to provide ACA fixes.