Ariel Fernandez (L) sits with Noel Nogues, an insurance  advisor with UniVista Insurance company, as he signs up for the Affordable Care Act, also known as Obamacare, before the February 15th deadline on February 5, 2015 in Miami, Florida.

Ariel Fernandez (L) sits with Noel Nogues, an insurance advisor with UniVista Insurance company, as he signs up for the Affordable Care Act, also known as Obamacare, before the February 15th deadline on February 5, 2015 in Miami, Florida.

Aetna this week joined other health insurers in withdrawing from many states where it offers plans through the Affordable Care Act. The company cited an unsustainable financial situation. But that motive is being questioned: We learned this week that Aetna warned it would reduce its presence in the exchanges if the Justice Department sued to block its deal to acquire Humana, which it did last month. Regardless, this latest pullback from Obamacare leaves a lot of questions about competitive options in the exchanges, how consumers will be affected, and the future of the law. We’ll get some answers, and look at how this might affect the presidential campaign.


  • Stephanie Armour Healthcare reporter, Wall Street Journal
  • Joseph Antos Wilson H. Taylor scholar in health care and retirement policy at the American Enterprise Institute; former health adviser to the Congressional Budget Office
  • Ron Pollack Executive director, Families USA
  • Julie Rovner Senior correspondent, Kaiser Health News; author of "Health Care Policy and Politics A-Z"

How The Election Will Impact The ACA's Future

How The Presidential Election Will Impact The Future Of Obamacare

This week, Aetna became the latest major health insurer to back out of its exchanges under the Affordable Care Act. The decision highlights the difficulties the government and health care companies continue to face as they struggle with enrollment, high premiums and costly claims. "The ACA is not perfect," wrote a listener named Sean during our recent show on Obamacare.


  • 10:06:53

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. In a blow to President Obama's signature healthcare law, Aetna announced it's backing out of many state exchanges created by the Affordable Care Act. It's just the latest insurer to do so. New revelations suggest the pullback could be related to the Justice Department suing to block Aetna's deal to acquire Humana. But many consumers are left wondering what this move means for insurance premiums and the future of the ACA.

  • 10:07:30

    MS. DIANE REHMHere with me, Stephanie Armour of The Wall Street Journal, Joseph Antos of the American Enterprise Institute, Julie Rovner of Kaiser Health News and Ron Pollack of Families USA. I hope you'll join us with your questions, comments. Call us on 800-433-8850. Send an email to

  • 10:07:57

    MS. DIANE REHMFollow us on Facebook or send us a tweet. And thank you all for being her.

  • 10:08:04


  • 10:08:04

    MR. JOSEPH ANTOSDelighted to be with you.

  • 10:08:04

    MR. RON POLLACKThank you.

  • 10:08:05

    REHMStephanie Armour, tell us exactly what Aetna announced this week.

  • 10:08:11

    ARMOURWell, they announced that they were going to pull out of almost a dozen exchange states where they participate. They basically were saying that they don't have the financial bandwidth to continue to participate on the exchange marketplaces and they were just the latest of a number of big insurers to announce they were withdrawing or retrenching from the exchanges.

  • 10:08:32

    REHMAnd why is Aetna's announcement so important?

  • 10:08:38

    ARMOURWell, it really handed an opportunity to the Republicans to continue to bludgeon the healthcare law to say that this is something that really isn't working. Insurance companies are not able to be profitable. We're going to be seeing higher premiums in the next open enrollment. And it gave them an opportunity to sort of push the GOP potential replacement for what they hope will eventually accomplish. Now, there's been a latest twist in terms of a letter that came put from Aetna to the Department of Justice saying that they would take steps to withdraw should there -- not be able to go through with their merger with Humana.

  • 10:09:22

    ARMOURAnd that's been cast in a number of different ways. It certainly has angered the Democrats who said, look, all along they questioning the motives of what Aetna decided to do.

  • 10:09:32

    REHMAnd Julie Rovner, do we know about the losses that Aetna says it's experienced, versus what we know about this letter?

  • 10:09:45

    MS. JULIE ROVNERWell, Aetna says it's lost $430 million since it started on the exchanges in 2014 and that its losses have been accelerating in the last quarter, but as recently as April, Aetna CEO Mark Bertolini was very bullish on the idea of staying in the exchanges. The other thing, it's important to look at this in context. Yes, $430 million is a lot of money, but as my colleague, Dan Diamond from Politico pointed out the other day, when Aetna -- in 2014, when this whole program started, Aetna's total market capitalization was $15 billion and this Monday, it was $42 billion.

  • 10:10:24

    MS. JULIE ROVNERSo losses of $430 million when you're that large a company aren't all that big.

  • 10:10:31

    REHMTell us about this letter, a copy of which you brought with you.

  • 10:10:36

    ROVNERWell, this was a letter -- and, of course, as Stephanie said, it's been cast in different ways. The Justice Department did ask Aetna, you know, what would happen if we don't let your merger go through and what they said was, basically the money that we would now have to spend on litigation, because the Justice Department is suing to stop the merger, is money that we were, you know, we can't afford these losses if we also have to spend money on litigation.

  • 10:10:58

    ROVNERThat's essentially what the letter said. But as I mentioned, you know, as recently as April, Aetna was very big on being in the exchanges, thinking that it's a market that will ultimately shake out and grow and they'll be able to make money on, even though they've been losing -- I mean, all the insurers have been losing money early on and we can talk about that. But this letter, the way it's phrased, and particularly depending on what paragraph you pick, does look like, if you don't allow our merger, we're going to pull out of the exchanges, 'cause that's essentially what it said.

  • 10:11:26

    REHMJoe Antos, how do you read both the Aetna withdrawal and this letter and these particular paragraphs?

  • 10:11:38

    ANTOSWell, given that the other major companies are also pulling back, it really says something about the Affordable Care Act as much as it says about the insurance companies. As far as the letter is concerned, as Julie said, this was a response to a question from the Justice Department. You know, the view that some people have that this was some kind of blackmail is a ludicrous idea. First of all, blackmail does not work on the government.

  • 10:12:07

    ANTOSAnd second of all, what that letter was really saying was that as a business decision, given this is a publically traded company, they're going to have to make decisions. Now, one thing that is not mentioned in the letter, not widely reported, but there's potentially a $1 billion breakup fee, if the merger with Humana doesn't go through. So that's a lot of money.

  • 10:12:37

    REHMA breakup fee that who will have to pay?

  • 10:12:41

    ANTOSThat Aetna would have to pay because they made the initial move for the merger, so...

  • 10:12:49

    REHMTo acquire Humana.

  • 10:12:50

    ANTOSRight, exactly. Now, it's up to -- and it's not clear, you know, it's very complicated like everything else in this business, but looking at that, that's a really big number. The other point about Bertolini in April is he had no information about what was going on this year so he was hoping that things were going to get better. They got worse. And this is public information. And, again, it's a publically created company so he had to address it in a way that his stockholders would think was a responsible business decision.

  • 10:13:24

    ANTOSYou know, as a public policy matter, maybe that's not so great, but this is a private business.

  • 10:13:32

    REHMHelp me understand, was Aetna making a substantial profit or not?

  • 10:13:39

    ANTOSOver their entire business...

  • 10:13:41

    REHMThrough the ACA.

  • 10:13:43

    ANTOSOh, no. Through the ACA, I think that letter's right. They and most of the other big companies were losing money hand over fist. You know, the...

  • 10:13:53

    REHMAnd yet, they were still a profitable company.

  • 10:13:57

    ANTOSRight. And so the question is, do these companies have an obligation to stay in if there's not prospect that conditions will change? And I would argue that unless some of the provisions that are really making it difficult for young people to sign up for these plans, unless those change, then the outlook will never improve. The risk pool will remain a very high cost pool with not enough people coming in who are not going to be high utilizers.

  • 10:14:31

    REHMRon Pollack, how do you see it?

  • 10:14:34

    POLLACKWell, let's put this in perspective. First of all, the total number of enrollees that Aetna had was 911,000 people. When Aetna -- when Bertolini sent his letter in April, he actually wasn't just saying that he was going to stay in the Affordable Care, he was going to expand the number of places that he was in. Aetna was going to move from 15 to 20 states.

  • 10:15:10

    REHMAll right. I want to back up here. Give me the exact date of that letter.

  • 10:15:15

    POLLACKSo that letter was sent on the 28th of April.

  • 10:15:19


  • 10:15:20

    POLLACKOf 2016.

  • 10:15:22

    REHM2016. And at that time, did Bertolini see Aetna as being profitable in the ACA?

  • 10:15:33

    POLLACKWell, he wrote, actually, a fair amount of things about how being in the exchanges actually enables them to acquire customers in a cost-effective manner. Now, that's not the same thing as saying that they were making a profit. I'm not saying that. But he wrote, actually, in a fair amount of detail about why this was good business decision for Aetna. Now, when you think about, they have 911,000 enrolled in Aetna plans in the exchanges and they're cutting back in a number of states, so there's going to be, in terms of the total portion of the consumers who are in the exchanges who are covered by Aetna, it's about 6 percent.

  • 10:16:27

    POLLACKIf you take the whole 911,000, it's about 8 percent. So this is not a really big deal. Now, at the same time that's going on, you take a look at some of the other insurers, Centene, Molina, Cigna, some of the Blues, Kaiser Permanente, they're saying they want to stay in the exchange. Some of them are saying, we're actually making a profit in the exchange. So I don't think this is going to be such a big deal.

  • 10:16:57

    REHMOkay. Not such a big deal from your perspective. I want to understand the timing of Aetna's move to acquire Humana. When did that begin, Julie?

  • 10:17:13

    ROVNEROh, it was last year, I believe.

  • 10:17:16

    REHMSome time in 2015.

  • 10:17:18

    ROVNER'15, right. And that's been...

  • 10:17:20

    REHMDoes an acquisition like that require advance permission from the Justice Department in order to avoid the likelihood of a merger that creates too large a company?

  • 10:17:40

    ROVNERWell, the Justice Department gets to decide whether or not they're going to try to block it. That's essentially what happens. And they did, in anticipation of this, they actually divested themselves, each of them divested themselves of some lines of business so that wouldn't happen.

  • 10:17:54

    REHMAll right. We'll continue our discussion after just a short break. I look forward to hearing your questions, comments. Stay with us.

  • 10:20:02

    REHMAnd welcome back. We're talking about the latest development in relation to the Affordable Care Act this week. Aetna announced it was stepping out of the Obama insurance plan. And we are talking about the effects of not only that but how the ACA is doing, what the Republicans are now saying about the Affordable Care Act as a result of Aetna's dropping out, and what the overall impact is going to be on each person who may currently be insured by Aetna through the ACA. What's the overall impact going to be, Julie Rovner?

  • 10:20:58

    ROVNERWell, like everything else with the Affordable Care Act and everything else with health care, it's all local. It depends. I mean, if you're in a market, in a county where there's five plans and Aetna drops out, now there's four plans. The problem is there are some places in between Aetna and Human and United -- which was the first one to announce that they were going to cut back on where they were serving -- we're now seeing a significantly larger number of counties where there's only one insurer, so there's basically no choice, and for the first time, a number of counties where there are no insurers on the exchange. So that together is a problem.

  • 10:21:29

    ROVNEROn the other hand, it's important to remember -- and people kind of freak out -- the individual market is still very small. It's bigger than it used to be. But the people who buy their own insurance are somewhere between 15 and 20 million people of, you know, 300 million people now, all but 20 million of whom have insurance. So almost everybody else gets their insurance some other way, either through an employer or through the government. There are very few people. And the whole point of the ACA was to stabilize the individual market, which was a very dysfunctional market before. It's now probably, depending -- that's the argument -- how much more functional it is now? Not entirely clear.

  • 10:22:06

    ROVNERBut it was anticipated that employers would drop coverage and so the individual market would get larger, because they could just send their employees. That didn't happen.

  • 10:22:14

    REHMAnd what did happen, Stephanie?

  • 10:22:17

    ARMOURWell, by and large, employers have not dropped people to move them onto the exchange, that is true. But I think that Julie gets at a really important point here that is troubling for both sides -- both Democrats and Republicans -- which is consumer choice. You are seeing an increasing number of counties with just one insurance plan to pick from. And I know that this is of great concern to both sides. And no matter what -- at what -- well, no matter what, specifically, drove Aetna's decision, there's no question that there are insurers who as an industry are very concerned about the steps the Obama administration is taking to make the market more sustainable for them.

  • 10:22:57

    REHMSuch as?

  • 10:22:59

    ARMOURWell, for example, they feel -- from the insurers I talked with -- like the Obama administration's doing half measures. They've been very concerned about the ability of people to enroll late, like outside of the open-enrollment period. The Obama administration has done some things along those lines to try and make it less easy, to make it not easy -- so easy to be abused. But insurers are saying, look, this does not go far enough. They're very concerned about the risk-adjustment formula. And so I think there's a pent-up frustration that is growing in terms of, they're feeling like they've really put a stake into this and then some concerns that not enough is being done to try and make this more sustainable.

  • 10:23:35

    REHMNot enough being done, Ron Pollack?

  • 10:23:38

    POLLACKWell, first, one of the things I want to make sure we talk about and that we're in the same terms, when we say there's one insurer or three insurers in a marketplace, it doesn't mean there are one or three plans in the marketplace, because each of the insurers typically have a number of plans. So choice for consumers has two different impacts. For some consumers, they want to have choice because they want to make sure their physician is in the plan.

  • 10:24:07


  • 10:24:08

    POLLACKThey want to make sure their drugs are on the formulary. So if you have multiple plans, even if it's one or two companies, you do have that choice. The other issue that we're talking about here is what does it do with respect to cost? What does it do to out-of-pocket costs? And, no question, the more competition, the likelihood costs will be down. But one of the things from a consumer perspective that's really important to understand is that subsidies are a key factor.

  • 10:24:37

    POLLACKThe way consumers think about it is not, what is the premium? It's what do I have to pay with respect to that premium? And so, as prices do go up somewhat -- they've been going up before the Affordable Care Act and they're going up afterwards -- the subsidies are going up. And 83 percent of the people in the exchanges are getting these subsidies.

  • 10:24:59

    REHMAll right, Julie, I want to ask you about the other companies that have dropped out of the ACA. Did they all cite profitability as a major cost? Or was it, as Stephanie alludes to, complications and the Obama administration's moving too slowly on making the necessary changes? What are the reasons behind all these withdrawals?

  • 10:25:36

    ROVNERWell, they all say that they're dropping out in places where they're losing money. The -- what Stephanie was getting to is, why are they losing so much money? It is not a surprise that this is an expensive market. Before the Affordable Care Act, people who were sick couldn't get into it. You couldn't buy insurance. So there were only healthy people. The idea was to spread the risk. So there are all these mechanisms to take profitable plans, make them pay part of it back so that the unprofitable plans could have some of that. There were, I mean, this was all built into it. Because they knew this would be an expensive market.

  • 10:26:07

    ROVNERBut what's happened, as Stephanie said, is that there are sick people that sign up, get a lot of care and then drop out and stop paying their premiums. There have been issues. There were unanticipated things that are happening and the administration's been trying to address it. But what these companies are saying is that they're not addressing it well enough or effectively enough. There was a risk-adjustment mechanism that, because the Republicans said it had to be revenue neutral, they couldn't bring in money from elsewhere. Only 12 percent of the claims for companies that were losing money got paid. That was what drove many of the co-ops -- made them insolvent, because they were expecting that money and it didn't happen.

  • 10:26:41

    ROVNERSo there have been a lot of things that haven't worked. And, as I mentioned, the risk pool -- yes, they knew there would be sick people, but they thought there would be more healthy people. One of the reasons there aren't more healthy people is that, this was the whole -- if you like your plan, you can keep it. Those people were allowed to keep their own plans, so they are not subsidizing the sick people in the individual market. It was a lot of things.

  • 10:27:02

    REHMSo, Joe Antos, lots of reasons behind these companies withdrawing. At the same time, the ordinary consumer sees profitability on the part of these companies, when their risk is a fairly small part of their profitability. Is that not the case?

  • 10:27:31

    ANTOSI'm not sure what your driving at, Diane. The fact is that, in the non-exchange markets, where they are making money, there's risk, sure. But the difference is that they're able to sell plans that people actually want to buy. And they're generally, let's realize...

  • 10:27:50

    REHMPretty good.

  • 10:27:50

    ANTOSYeah, they're good plans.

  • 10:27:51


  • 10:27:52

    ANTOSBecause they're selling in the -- mainly in the employer market, where people are getting contributions from their employers. They're -- they have jobs. Most people have good jobs. So it's an entirely different market. Breaking into this individual market -- the individual market never did work well. And so what we found here is that the ACA has been unsuccessful in making it work as well as the employer market. That's not a big surprise. The problem here is, I don't think, you know, worrying about what might have been is the issue here. I think the question is looking forward. What's going to change, that's going to make this market work?

  • 10:28:39

    REHMAnd what do you think needs to change, first and foremost?

  • 10:28:44

    ANTOSWell, there are many things. But the one thing that would probably have the greatest impact in bringing young people into these exchange markets is to change the, it's called age rating. Basically, what the ACA has done is they are -- have torqued the premiums that people have to pay so that, now, young people in the exchanges pay a lot more than they would have in the past. And older people...

  • 10:29:12

    REHMWhen you say young, who are you talking about?

  • 10:29:15

    ANTOSWell, people in their 20s, as compared to people in, say, their late 50s or early 60s. And the -- I think the idea was that, you know, the government wanted to do -- give people who are sicker, in general, a little bit of break on the premium. Well, they succeeded. So we have sicker people in the exchanges. But what we really need is a more balanced pool. And in order to do that, you need younger, healthier people.

  • 10:29:40

    REHMAnd they're...

  • 10:29:40

    POLLACKYou know, I agree with the last comment that Joe made about, we do want younger, healthier people in the pool. But what I don't agree with, what Joe said, is that the whole operation of the Affordable Care Act really discriminates and harms younger people, for the following reason. If you take a look at how the subsidy system works, it's provided on a sliding scale. The lower your income, the greater the subsidy.

  • 10:30:09

    POLLACKAnd when you think about the age group that benefits most significantly by that sliding scale set of subsidies, it's younger folks. Because they're either in entry-level jobs or they don't have a job. And so they get the higher subsidies. It is true that the premium is higher, but the out-of-pocket costs that these younger folks are paying is quite a bit lower because they're getting the bulk of the subsidies.

  • 10:30:36

    REHMWhat about that, Joe?

  • 10:30:37

    ANTOSThat's right. Ron is absolutely right. But only for people at very low levels of income, basically in the roughly 175 percent of poverty to 250 percent of poverty range. That's the sweet spot. That's where you get the best subsidies. Above that...

  • 10:30:56

    POLLACKAnd that's where you've got most of the young people.

  • 10:30:58

    ANTOSAnd that's where you get actually most of the enrollment. Above that, you don't have that much enrollment and that's part of the problem. What it's saying is that the product is not attractive enough to these people, for whatever reason. It may be the product. It may be them. But for whatever reason, they don't want to buy it unless it's heavily subsidized.

  • 10:31:16


  • 10:31:17

    ROVNERI think this is all true. There are a lot of young people, though, who are -- who probably should have insurance and don't, because they don't want to spend -- they, you know, they perceive that they don't have any money. I mean, rent is expensive. People have student loans. It's just one more expense that they feel like they can't afford.

  • 10:31:35

    REHMEven with the subsidies.

  • 10:31:37

    ROVNEREven with the subsidies.

  • 10:31:38


  • 10:31:39

    ROVNERAnd also it's still a little bit of a hassle to sign up. There's a lot of help. There's a lot of outreach. But, you know, there are a lot of choices to be made if you've never had insurance before. It's confusing. You know, as hard as they've tried to make it simple, it's never going to be really simple.

  • 10:31:53

    REHMStephanie, have we seen the administration try to address some of the issues that Ron and Joe have both raised in regard to the ACA?

  • 10:32:11

    ARMOURI do think that we have. And speaking of young people, they announced, I think it was in July, that one of their main goals for this next open-enrollment period, which begins in November, is going to be a targeted outreach to young people. And I do think that is why this next enrollment period is going to be so pivotal. We're going to get a sense as to, is that targeted outreach going to work? But we're also going to get a sense as to how many insurance companies are participating, what are the premium rate increases going to be?

  • 10:32:40

    ARMOURAnd that's going to be really valuable information as we start to look at, are the markets that are on the exchange going to be dominated by these large insurance companies? Or are we going to see more smaller, regional carriers really dominate the marketplace, who have kind of a -- more of a track record of insuring this population.

  • 10:32:59


  • 10:32:59

    ARMOURAnd I think we're going to get more of a sense.

  • 10:33:01

    REHMAnd is the administration moving forward to try to encourage those smaller companies?

  • 10:33:09

    ARMOURThey are very much -- they are in regular talks. They're working on these issues. I think state regulators are also trying to bring other insurers in. I know state regulators have been very frustrated to some extent by the insurers who are threatening to pull out, because they say, look, we're over a barrel. We have to approve their high premium-rate increase in order to keep them in.

  • 10:33:29

    REHMStephanie Armour, she's health care reporter for The Wall Street Journal. And you're listening to "The Diane Rehm Show." It's time to open the phones. We've got lots of callers. First, to Grand Rapids, Mich. Andy, you're on the air.

  • 10:33:52

    ANDYGood morning, Diane.

  • 10:33:53


  • 10:33:53

    ANDYFirst-time caller.

  • 10:33:54


  • 10:33:56

    ANDYNo problem. Hey, you know, it kind of sounds to me like possibly the insurance companies are blackmailing the states a little bit, you know? You know, it just -- it seems like, you know, if you don't let us do our rates, then we're just going to pull right on out.

  • 10:34:14

    REHMWhat do you think, Ron Pollack?

  • 10:34:17

    POLLACKWell, the rates that we've seen so far are preliminary. There is being a careful review, state by state, in terms of the requests being made by the various insurers. And so we don't yet know how significant the premium increases are going to be. They are likely to increase this year. And they're probably going to be somewhat greater increases than we've seen in the prior year. But, again, I have to underscore, as those premiums go up, so go the subsidies.

  • 10:34:47

    REHMYeah, but we're not answering his question. Go ahead, Julie.

  • 10:34:51

    ROVNERWell, you know, these are businesses. And they have -- even the nonprofits have to make money. One -- some -- one Wall Street analyst once talked about Kaiser Permanente as not for profit and very good at it. You can't lose money indefinitely. So they do, you know, as -- and as we've pointed out, the risk pool, I mean, once it was -- once the individual market was opened to people with pre-existing conditions and sick people, they were the first ones to sign up. We knew that was going to happen. So now, in -- we have, particularly drug costs have been going up a lot. That's a whole 'nother subject. But that's one of the main reasons that these insurers are citing and saying, we need higher premiums.

  • 10:35:26

    ROVNERSo you can call it what you want, but at some point they're going to have to make enough money to cover their costs. Is it, you know, is it -- or they're going to not want to pay anymore.

  • 10:35:37


  • 10:35:37

    ROVNERThat's the structure of the law.

  • 10:35:38

    ARMOURJust to specifically get to his question, some of the state regulators I think very much feel like they're over a barrel and feeling to some extent blackmailed by this. I know that some of them have been quite upset and feeling like these are not rate increases we would necessarily normally approve. But we're -- risk them pulling out if we don't.

  • 10:35:59


  • 10:36:01

    ANTOSYeah. That's exactly right. The fact is that the pullouts by Aetna and the other large companies, that wasn't blackmail. Because they're saying they're pulling out. They're not negotiating over rates. They're saying, we just can't be in your market.

  • 10:36:18

    REHMBut it's that letter from Aetna to the Department of Justice, I think, that certainly raises questions about at least Aetna, if not the other companies, would you say?

  • 10:36:35

    ROVNERWell, and before we go any further, we should point out that it was the Huffington Post that managed to get this letter. So thank you to those guys. You know, it depends, as you say, how you read it. They were -- that was the question that they were asked by the Justice Department, what will happen to, you know, your exchange operations if we don't approve your merger, essentially? And they said, if you don't approve our merger, we're going to have to spend money on other things, so we're going to want to stop losing money in the exchange. That's essentially what it said. You can call it whatever you want, but it was a direct answer to a question.

  • 10:37:05


  • 10:37:08

    POLLACKCertainly putting pressure, if you don't want to call it blackmail. And it's certainly a big turnaround from Bertolini's letter in April.

  • 10:37:17

    REHMAll right. Ron Pollack is executive director of Families USA. Short break here. More of your calls, questions, when we come back. Stay with us.

  • 10:40:01

    REHMAnd welcome back. We are talking about Aetna. Its announcement that it will no longer participate in the Affordable Care Act in some areas. Of course, many, many other insurance companies continue to do so. I want to read for you an email from Laura who says I'm too young for Medicare, but I don't work in order to care for my husband who has mid-stage Alzheimer's. Thanks goodness he has Medicare. We're trying to save up for his care as the disease advances.

  • 10:40:51

    REHMMy personal health insurance premium is over 630 dollars a month and I fear it will go up next year. I am a healthy 58-year-old and wonder if it would be cheaper to pay the fine to the IRS. Julie.

  • 10:41:13

    ROVNERWell, the short answer is yes, it would be cheaper, but then, she wouldn't have health insurance. And, you know, the reason that premiums are higher for people in their, you know, 50s and up, and I'm one of them, is that statistically, you have much more of a chance of needing expensive healthcare at that point than when you're in your 20s.

  • 10:41:30

    REHMSo what is the fine?

  • 10:41:32

    ROVNERThe fine, this year and going forward, because it's been phasing up, is the greater of 695 dollars, which you would pay with your taxes, so that's an annual thing. Two and a half percent of income up to the national -- the cost of the national average Bronze Plan, Bronze being the lowest tier, which last year was about - roughly 2500 dollars. So, the maximum fine would be -- the, basically the cost of buying the least expensive plan.

  • 10:41:58

    REHMSo, what she would be doing is taking a chance on what four years?

  • 10:42:06

    ROVNEROh, more than that...

  • 10:42:07

    REHM58 to...

  • 10:42:07

    ROVNER...qualified to 65.

  • 10:42:09

    REHM65 is now Medicare.

  • 10:42:12

    ROVNERSeven years. Yes.

  • 10:42:12

    REHMWow. That's tough. She's got a real choice in front of her. Go ahead, Joe.

  • 10:42:20

    ANTOSBut she may be exempt from this fine. There are a lot of different reasons why you wouldn't have to pay the fine. There's a form that HHS puts out. It has 14 categories and so if I were to give her advice, I'd say get the form and see what happens.

  • 10:42:38

    ROVNERBut then you still -- she still wouldn't have health insurance, though.

  • 10:42:40

    ANTOSWell, right. I agree. I think that's the fundamental point. If she gets sick, her husband's in trouble.

  • 10:42:45

    REHMRight. Exactly. Let's go to Kim in San Antonio, Texas. You're on the air.

  • 10:42:52

    KIMYes, I live in Texas and we're one of the states that did not extend Medicaid, so I'm kind of in that, you know, abyss. My main objection or problem is not with the healthcare. I think the insurance companies are controlling, you know, the market, but my main concern is that one of the reasons that they're claiming to have lost money is that they mismanage funds. I've had the policy in the marketplace for three years, or whenever it started. And from the very beginning, I asked for electronic communication and direct withdrawal of my premium.

  • 10:43:49

    KIMFor three years, every month, I get an envelope that has six or so papers in it. Self-addressed envelopes advertising for other products, an invoice, a other...

  • 10:44:09

    REHMSo, so it's a very full envelope with a lot of extraneous information she does not need. In addition to which, she asked that it be done electronically.

  • 10:44:24

    ROVNERI think Joe mentioned earlier, for a lot of these companies, they were not big presences in the individual market. They didn't know how to do this, and some of them, from what I'm hearing, still don't know how to do this. So I hear lots and lots of questions and complaints about I sent my premium, they cashed the check and then they send me a note that they didn't get the premium. So there have been all kinds of troubles, you know, bureaucratic troubles.

  • 10:44:49

    ROVNERIs that causing the losses? Probably not, but it's certainly causing an enormous amount of frustration for the customers.

  • 10:44:54

    REHMAll right, and here's an email from Sean, who says, this begs consideration of the larger context. The ACA is not perfect, but the Obama Administration cannot refine it because Congress refuses to accept the law. How can we move forward? Joe.

  • 10:45:20

    ANTOSBetter luck next year. The reality is, we need a new President. We're having an election in November, and we will have a new President, and whoever that person is, even if it's a Republican, the idea of simply repealing the ACA is -- it's not feasible.

  • 10:45:41

    POLLACKSo I want to -- I want to...

  • 10:45:43

    ANTOSBut, but, but, but my point is that there is an opportunity next year that should be taken, by whoever is President, and the Congress to resolve some of these problems. It won't be perfect, but if you just sit there, it will get worse.

  • 10:45:56

    POLLACKSo, I think what will happen, after the election, one way or another, this debate that's been vituperative and rigid is going to change significantly in 2017. It's going to change in two different ways, depending on who gets elected. If Donald Trump gets elected, I think some of the key architecture of the Affordable Care Act is probably going to be repealed. Not the whole statute, but I could see the subsidies going, the Medicaid expansion going. And so it will end that debate.

  • 10:46:24

    POLLACKIf Hillary Clinton is elected, I think it's going to be very different. If she is elected, I think there's no longer any credibility about trying to repeal the Affordable Care Act. We've had 60 plus attempts to try to repeal it. We've had two major Supreme Court...

  • 10:46:40

    REHMI stopped counting at about 42.

  • 10:46:42

    POLLACK...well, you were smart to do so. And so, what that does, that Joe was alluding to, is that I think for the first time in at least six years, there's an opportunity for some bipartisanship. Because the debate is no longer going to be is the Affordable Care Act going to be repealed or will it stay? It will stay.

  • 10:47:04

    REHMWhat do you think, Stephanie?

  • 10:47:06

    ARMOURI think that's optimistic. I think it really is going to depend on the election. And what happens in Congress. I think that -- I think the idea that there will not be strong partisan bickering is -- it would be nice, but I don't think that's going to be the case. I think lines are already being divided over the public option that Hillary Clinton has said that she would support. I know from the Republicans I've talked to and staffers on the Hill that this is something that they're already bracing to oppose. So, where this goes, I do think that Hillary Clinton would very much like to focus on fixing on some of the problems.

  • 10:47:46

    ARMOURBut not just fixing the problems. Expanding and doing more to get more coverage, public option. How much that will take off, I don't know.

  • 10:47:55

    POLLACKSo Stephanie, I think you're right about the public option. That clearly is a very controversial...

  • 10:48:01

    REHMWhat does that mean?

  • 10:48:01

    POLLACK...public option means that there is an opportunity for the government to provide a health plan...

  • 10:48:10


  • 10:48:11

    POLLACKIt, it, it's an alternative for the private plans that exist. And that was clearly resisted by Republicans. It will continue to be resisted by Republicans.

  • 10:48:21

    ROVNERAnd some Democrats.

  • 10:48:22

    POLLACKAnd some Democrats. That's right, because in 2009, 2010, we couldn't get all the Democrats in the Senate to pass this. But that doesn't mean that there won't be some significant potential for bipartisan action.

  • 10:48:36

    REHMAll right, here's an email from Anna, who says, I'm a salaried physician. My employer is experiencing financial distress. Many of my patients feel financial pressures related to their healthcare costs. Your show is about how insurers are not making money. My question is this, where is all the money? Doctors in healthcare systems are underpaid, patients can't afford care, and insurers are claiming poor profitability. Costs are out of control, but most parties are insulated from it. The solution must lie elsewhere. Joe, have you got that magic bullet?

  • 10:49:29

    ANTOSI don't think anybody does, but the idea that anybody's underpaid in the health sector is complete bologna. We're pouring...

  • 10:49:38

    REHMI take issue with that, Joe. My -- I have both a daughter and son-in-law, both physicians, who work in a hospital system where doctors are actually being laid off.

  • 10:49:58

    ANTOS...that may well be the case, but my point is that, that there's so much money coming from the taxpayer into the health sector. And remember that this...

  • 10:50:08

    REHMBut where's it going? That's the issue.

  • 10:50:10

    ANTOSIt's going to the -- ultimately, it's going to the hospitals and the other providers.

  • 10:50:14

    REHMIt's going to, it's going also to the stock holders, is it not?

  • 10:50:19

    ANTOSRight, right. It's spreading all over the place.

  • 10:50:22


  • 10:50:22

    ANTOSBut part of the problem here is that we've had tremendous consolidation on the provider side. That has -- that's been going on for a long time, but it was accelerated by the Affordable Care Act. And so, the insurers have a problem that frankly, the ones -- Centene's and Molina, the ones that are the Medicaid insurers don't have the same problem as these others because Centene and Molina have really tight networks, frankly, not very good provider networks.

  • 10:50:54

    ANTOSBut, they're paying a very, very low rate. They're basically paying a Medicaid rate. These other big companies that are dropping out, they're starting high. They are the big -- they are the high payers. And they're having trouble negotiating lower rates.

  • 10:51:08

    REHMAll right. Let's go to Glenwood Springs, Colorado. Roger, you're on the air.

  • 10:51:16

    ROGERHi, thanks for taking my call.

  • 10:51:18


  • 10:51:19

    ROGERMy, my question is, or my comment/question is is the western slope of Colorado is one of the highest premium areas in the country.

  • 10:51:30

    REHMWell, I wonder, I wonder why that is.

  • 10:51:34

    ROGERNobody can figure it out. Nobody understands it, but my case in point is I was very much in favor of the Affordable Care Act when it started. I had to take four months off of work between two jobs and my new insurance didn't start so I had to go on the Affordable Care Act. My premium was 1,000 dollars a month with a 10,000 dollar deductible. Meaning if I had to stay on that for the entire year, I would out of pocket 22,000 dollars before insurance every started kicking in. Not the Affordable Care Act.

  • 10:52:07

    REHMTell me how old you are.

  • 10:52:12

    ROGERWhen I took that out, I was in my late 40s.

  • 10:52:16


  • 10:52:16

    ROGERI just turned 50.

  • 10:52:18

    ARMOUR...absolutely, the western part of Colorado has seen some of the highest premiums in the country. Part of it is it's relatively rural, what towns there are, they are very small. It's hard to create a network, as Joe was saying. Sometimes there's only one hospital, so the hospital can dictate the rates. I mean, it was a -- it's sort of a variety of reasons, but, you know, and it's hard to -- if you've ever driven in Western Colorado, it looks, you know, oh, it doesn't look very far, except it's up and down the entire way.

  • 10:52:44

    ARMOURSo, you can sort of see what some of the problem is. Nobody knows exactly why it has gotten as expensive as it has, but there are, you know, pockets that, as I said earlier, it's very local. Some places, it's very affordable, and some places, it's really expensive.

  • 10:52:59

    REHMAnd you're listening to The Diane Rehm Show. Let's go now to Oriental, North Carolina. Catherine, you're on the air.

  • 10:53:11

    CATHERINEThank you, Diane. I'm amazed that I got through and thrilled to hear your voice in person. Well, I guess it's not really in person, but anyway, you know what I mean.

  • 10:53:18


  • 10:53:19

    CATHERINEI listen to you all the time.

  • 10:53:20


  • 10:53:21

    CATHERINEI live in the southeast part of North Carolina. It is mostly rural and poor. When the Affordable Care Act came out, the Governor vetoed chances for people of low income to have insurance, that they opted out of that part of the Affordable Care Act. People here cannot afford the insurance. My daughter's husband had to go back into the military reserves in order to get insurance, because they can't afford the insurance from the Affordable Care Act.

  • 10:53:55

    CATHERINEBut now, physicians, and I have a number of personal friends who are physicians, who are not, and I'm sorry Joe, but that's just not right. They are not trying to haul in money. They are trying to get their kids through college and make car payments and like the rest of us. They are not being paid enough by the provider to stay in business. Of course, we don't have any choice here because of politics. Only Blue Cross/Blue Shield is the only insurer that we are allowed to select from.

  • 10:54:21


  • 10:54:22

    POLLACKSo, what Catherine was saying a moment ago, and a previous caller from Texas was saying, for low income people, there really is an issue in places like North Carolina and Texas because they are part of the 19 states that have, so far, refused to implement the Medicaid program. I think, over time...

  • 10:54:39

    REHMIs that pure politics?

  • 10:54:41

    POLLACKAbsolutely. Absolutely. Because the deal that the federal government has made for the states has been extraordinary. In the first three years, the federal government is picking up 100 percent of the costs of the expansion. Next year, it's 95 percent. It will never go below 90 percent. So, this is extraordinary. The reason for it is that these governors and state legislators, they don't want to have anything to do right now with the Affordable Care Act, because they think, you know, politically, it is not a good thing for a Republican.

  • 10:55:12

    POLLACKThey're worried that they're going to face a primary election by somebody who's going to lambaste them for being cooperating with the Affordable Care Act. That's one of the other things that I think is likely to change with respect to the election. Because some of these folks don't want to go out on a limb and say, I'm going to cooperate. I'm going to expand Medicaid. If there's still a significant possibility that the Affordable Care Act is going to be repealed, when the prospect of repeal is eliminated, which would happen if Hillary Clinton is elected, then I think some of Governors, including some of the previous conservative Governors in places like Arizona, Ohio, and Iowa.

  • 10:55:52

    REHMNorth Carolina.

  • 10:55:52

    POLLACKAre going to say, what's good for my people in my state? We're paying taxes. Should it just be spent in California? Should it just be spent in Ohio?

  • 10:56:01

    REHMWhat do you think, Joe? If Hillary Clinton wins the election, what do you think's going to happen to the ACA?

  • 10:56:11

    ANTOSWell, if she wins the election, certainly, I think, there will be some changes that will be necessary. And I think it will be part of -- it will be part of a budget deal. I see, you know, maybe very late in 2017, I see a lot of things coming together. Because it's not just healthcare that needs to be addressed. And she and her people know how to negotiate. They know how to put a deal together, so I'm very optimistic that many of these problems will be solved.

  • 10:56:43

    REHMDo you agree, Julie?

  • 10:56:44

    ROVNERI think it depends whether the Democrats take the Senate back, which is...

  • 10:56:48

    ANTOSWell, well, that's -- I'm assuming that.

  • 10:56:50

    ROVNERI mean, I think it's entirely possible.

  • 10:56:52

    REHMI'm making no assumptions. How about you, Stephanie?

  • 10:56:54

    ARMOURI was with Julie. I think it really depends on what happens with Congress in terms of how much bipartisanship we're going to be seeing.

  • 10:57:00

    REHMAll right, we'll have to leave it there. I do want to let listeners know that Aetna was invited to participate this morning. We sent an email, never heard back. Stephanie Armour is with the Wall Street Journal. Joseph Antos is at the American Enterprise Institute. Julie Rover for Kaiser Health News. And Ron Pollack of Families USA. Thank you, all.

  • 10:57:36

    ANTOSThank you, Diane.

  • 10:57:36

    ROVNERThank you, Diane.

  • 10:57:36

    POLLACKThank you, Diane.

  • 10:57:36

    ARMOURThank you, Diane.

  • 10:57:37

    REHMAnd thanks all, for listening. I'm Diane Rehm.

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