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One teenager in Iowa who costs $12 million a year to insure perfectly encapsulates the successes and failings of Obamacare
Over the past couple of years there has been a mystery in the Iowa individual insurance market.
According to Blue Cross Blue Shield insurer Wellmark, there was a patient in the state's Affordable Care Act (Obamacare) exchanges who required $1 million a month in care.
This staggering $12 million in care each year was distorting the insurer's exchange business and forcing it to raise premiums across the exchange rapidly.
The story is heartbreaking, but it also has implications for the insurance market in the state.
On a broader scale, this one case also shows why Obamacare's exchanges are facing problems — and why they have been saviors for many sick Americans.
Needed changes
This particular case is special, according to the Des Moines Register. The cost of care for most hemophiliacs tops out at $1 million annually (which is still incredibly costly). This case is an extreme example of the problems facing the Obamacare markets." data-reactid="31" style="margin-bottom: 1em; color: rgb(38, 40, 42); font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; background-color: rgb(255, 255, 255);">This particular case is special, according to the Des Moines Register. The cost of care for most hemophiliacs tops out at $1 million annually (which is still incredibly costly). This case is an extreme example of the problems facing the Obamacare markets.
Obamacare mandated that insurers cover people even if they had preexisting conditions that insurers previously could use to deny coverage. According to Larry Levitt, a senior vice president at the nonpartisan health-policy think tank The Kaiser Family Foundation, this naturally led to problems." data-reactid="32" style="margin-bottom: 1em; color: rgb(38, 40, 42); font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; background-color: rgb(255, 255, 255);">Obamacare mandated that insurers cover people even if they had preexisting conditions that insurers previously could use to deny coverage. According to Larry Levitt, a senior vice president at the nonpartisan health-policy think tank The Kaiser Family Foundation, this naturally led to problems.
"Of course making insurance more accessible for people with preexisting conditions has also created challenges for the stability of the individual insurance market," Levitt told Business Insider. "Covering the cost of very expensive patients raises the potential need for a reinsurance pool of some sort that existed in the first three years of the ACA and is part of the [American Health Care Act]."" data-reactid="33" style="margin-bottom: 1em; color: rgb(38, 40, 42); font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; background-color: rgb(255, 255, 255);">"Of course making insurance more accessible for people with preexisting conditions has also created challenges for the stability of the individual insurance market," Levitt told Business Insider. "Covering the cost of very expensive patients raises the potential need for a reinsurance pool of some sort that existed in the first three years of the ACA and is part of the [American Health Care Act]."
Reinsurance is a policy that provides some federal funding to offset insurers' higher costs incurred from covering a sicker pool of patients." data-reactid="34" style="margin-bottom: 1em; color: rgb(38, 40, 42); font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; background-color: rgb(255, 255, 255);">Reinsurance is a policy that provides some federal funding to offset insurers' higher costs incurred from covering a sicker pool of patients.
The Iowa case also fits in with the trend of an increased number of older and sicker people signing up for ACA plans than originally expected since the exchanges came online.
In turn, premiums increased dramatically and insurers suffered substantial financial losses. Losses were so great at some insurers — especially those who mismanaged their plan structures — that they decided to leave these markets.
Levitt also said that a smaller market like Iowa's is even more problematic because there are fewer healthy people in the risk pool to offset the cost for an insurer such as Wellmark.
While these issues certainly need to be fixed in order to provide a more stable market for everyone in the exchanges, the story also gives a strong example for why Obamacare has been a success as well.
Success story
It is apparent that, from the insurer's side of things, the structure of the Obamacare markets presents a substantial issue when facing such high expenses. From the patient's side of things, however, the ACA is likely a godsend.
As pointed out by Levitt, some of the regulatory changes in Obamacare most likely saved the patient's family from serious financial stress and possibly serious health consequences.
An expensive patient like this would have faced any number of challenges getting and affording health care before the ACA," Levitt told Business Insider on Thursday. "Such an expensive condition would be a whopping preexisting condition, and no insurer would have offered him insurance."" data-reactid="42" style="margin-bottom: 1em; color: rgb(38, 40, 42); font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; background-color: rgb(255, 255, 255);">"An expensive patient like this would have faced any number of challenges getting and affording health care before the ACA," Levitt told Business Insider on Thursday. "Such an expensive condition would be a whopping preexisting condition, and no insurer would have offered him insurance."
The community rating, a provision of Obamacare, obligates insurers to price premiums the same for people of the same age in the same area. This prevented people with preexisting conditions from being charged more than healthy people and getting priced out of the market.
Without that provision, an insurance company could raise premiums for a sick patient substantially to offset some of their costs, but the price could be so high that it would be financially crippling for the patient's family.
Over the past couple of years there has been a mystery in the Iowa individual insurance market.
According to Blue Cross Blue Shield insurer Wellmark, there was a patient in the state's Affordable Care Act (Obamacare) exchanges who required $1 million a month in care.
This staggering $12 million in care each year was distorting the insurer's exchange business and forcing it to raise premiums across the exchange rapidly.
The story is heartbreaking, but it also has implications for the insurance market in the state.
On a broader scale, this one case also shows why Obamacare's exchanges are facing problems — and why they have been saviors for many sick Americans.
Needed changes
This particular case is special, according to the Des Moines Register. The cost of care for most hemophiliacs tops out at $1 million annually (which is still incredibly costly). This case is an extreme example of the problems facing the Obamacare markets." data-reactid="31" style="margin-bottom: 1em; color: rgb(38, 40, 42); font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; background-color: rgb(255, 255, 255);">This particular case is special, according to the Des Moines Register. The cost of care for most hemophiliacs tops out at $1 million annually (which is still incredibly costly). This case is an extreme example of the problems facing the Obamacare markets.
Obamacare mandated that insurers cover people even if they had preexisting conditions that insurers previously could use to deny coverage. According to Larry Levitt, a senior vice president at the nonpartisan health-policy think tank The Kaiser Family Foundation, this naturally led to problems." data-reactid="32" style="margin-bottom: 1em; color: rgb(38, 40, 42); font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; background-color: rgb(255, 255, 255);">Obamacare mandated that insurers cover people even if they had preexisting conditions that insurers previously could use to deny coverage. According to Larry Levitt, a senior vice president at the nonpartisan health-policy think tank The Kaiser Family Foundation, this naturally led to problems.
"Of course making insurance more accessible for people with preexisting conditions has also created challenges for the stability of the individual insurance market," Levitt told Business Insider. "Covering the cost of very expensive patients raises the potential need for a reinsurance pool of some sort that existed in the first three years of the ACA and is part of the [American Health Care Act]."" data-reactid="33" style="margin-bottom: 1em; color: rgb(38, 40, 42); font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; background-color: rgb(255, 255, 255);">"Of course making insurance more accessible for people with preexisting conditions has also created challenges for the stability of the individual insurance market," Levitt told Business Insider. "Covering the cost of very expensive patients raises the potential need for a reinsurance pool of some sort that existed in the first three years of the ACA and is part of the [American Health Care Act]."
Reinsurance is a policy that provides some federal funding to offset insurers' higher costs incurred from covering a sicker pool of patients." data-reactid="34" style="margin-bottom: 1em; color: rgb(38, 40, 42); font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; background-color: rgb(255, 255, 255);">Reinsurance is a policy that provides some federal funding to offset insurers' higher costs incurred from covering a sicker pool of patients.
The Iowa case also fits in with the trend of an increased number of older and sicker people signing up for ACA plans than originally expected since the exchanges came online.
In turn, premiums increased dramatically and insurers suffered substantial financial losses. Losses were so great at some insurers — especially those who mismanaged their plan structures — that they decided to leave these markets.
Levitt also said that a smaller market like Iowa's is even more problematic because there are fewer healthy people in the risk pool to offset the cost for an insurer such as Wellmark.
While these issues certainly need to be fixed in order to provide a more stable market for everyone in the exchanges, the story also gives a strong example for why Obamacare has been a success as well.
Success story
It is apparent that, from the insurer's side of things, the structure of the Obamacare markets presents a substantial issue when facing such high expenses. From the patient's side of things, however, the ACA is likely a godsend.
As pointed out by Levitt, some of the regulatory changes in Obamacare most likely saved the patient's family from serious financial stress and possibly serious health consequences.
An expensive patient like this would have faced any number of challenges getting and affording health care before the ACA," Levitt told Business Insider on Thursday. "Such an expensive condition would be a whopping preexisting condition, and no insurer would have offered him insurance."" data-reactid="42" style="margin-bottom: 1em; color: rgb(38, 40, 42); font-family: "Helvetica Neue", Helvetica, Arial, sans-serif; font-size: 15px; background-color: rgb(255, 255, 255);">"An expensive patient like this would have faced any number of challenges getting and affording health care before the ACA," Levitt told Business Insider on Thursday. "Such an expensive condition would be a whopping preexisting condition, and no insurer would have offered him insurance."
The community rating, a provision of Obamacare, obligates insurers to price premiums the same for people of the same age in the same area. This prevented people with preexisting conditions from being charged more than healthy people and getting priced out of the market.
Without that provision, an insurance company could raise premiums for a sick patient substantially to offset some of their costs, but the price could be so high that it would be financially crippling for the patient's family.
