← Becker’s Healthcare Podcast
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- [00:00]
A
This is Scott Becker with the Becker Healthcare Podcast. Today is one of my favorite parts of the week. I get to speak today to Jacob Emerson. Jacob covers at Becker's Healthcare the payer universe, the payer landscape. And one of the things I love about talking to our different lead journalists and brilliant people like Jacob Emerson is I'm hoping that I learn, while our audience learns what's going on in the payer world. And that's the world he covers. Jacob, I'm going to tee it up. I'll ask you to take it away. What are a couple of things that you're watching closely in the pay world currently?
- [00:34]
B
Sure, it's good to talk with you, Scott. It's been too long since we last chatted, but I thought today we could talk about everything that's been going on over these last few weeks to a month with the ACA enhanced subsidies. Of course, it's been in the spotlight politically because it's what the shutdown hinged on. And there, of course, has been no solution legislatively to what's going to happen to these subsidies ultimately to people's premiums as we head into next year. But our team has really been over these last few weeks, really touching base with leaders all over the country, both at health plans and at health systems. You know, just to figure out how are you preparing for all of this going into next year in terms of you're going to see they're going to see a lot of membership losses within their individual businesses on the health plan side. So that makes things worse for the people who do stay in the exchanges and then how the health systems are preparing for all of this in terms of what this means for their payer mixes a rise in uncompensated care as people just don't purchase this type of insurance anymore. So just a lot of different swirling factors going on here. I thought we could dive into really what we're seeing today as, as at the end of November, certainly.
- [01:47]
A
And one of things I found fascinating is President Trump seemed to sort of want to find a way to meet this in the middle.
- [01:53]
B
Yeah.
- [01:54]
A
Continue some of the subsidies for a couple of years. And of course, this was met maybe with applause on the left and absolute hatred on the right, where it seems like almost people on the right are so excited to get rid of these subsidies for right or for wrong. There's all kinds of thoughts on whether these are good or bad. I think all of us, at least in health care, believe we should have coverage for all, whether the subsidies or the ACA the right way to get there? I don't know. But I think generally us in health care think we need coverage for all, but we also need access and supply for all. But, but talk to us about this fight on the right. President Trump got an in front then saying, okay, let's continue for a bit. And then he got flanked by the right wing who said, no, no, no, no, we're so thrilled to have these out of here. Talk about what's going on there. Yeah.
- [02:42]
B
I mean, I think just from that, that last piece, the Republicans are in a pretty difficult position right now because, you know, when you look at who is enrolled or where, a lot of the enrollment growth in the ACA has come from over these last few years. It's in red states where you where in the past you saw really high unemployment. Shared rates still do, of course, but places like Florida, Texas and a lot of the south, they led ACA enrollment growth over these last few years. And so this directly hurts constituents on the ground for, for Republicans, especially those in the House. And they know this is, this is not a winning issue as we head into midterms next year. So there's that side of it. But then of course there's, there's the side of it that it's, that it is Obamacare. And I think just if, you know, we look at the grand scale of the grand history of all of this, they are against that and they don't want to, to continue this, this policy or this system as it currently stands. So the Republicans are definitely split right now. I think that's why we're seeing so much waffling from, from the president, from, in the White House. And, and then of course, that's why we're seeing some House Republicans have introduced legislation to extend the subsidies, especially those that are in really close elections next year. But then there's the, there's the really traditional hardline conservatives that do not want any kind of extension made to, to the Affordable Care moving forward. They want to let it essentially die on the vine. So I think that's where, you know, the Republicans are struggling here. And that's really over these last few days. Like I said, where we've seen the president go is we, we heard there were reports, very credible reports that the White House wanted to roll out this, this new policy to extend the subsidies, the enhanced subsidies for two years, introduce some, some premiums into, into the aca so that to avoid some of the fraud issues that Republicans have really been flagging these last few years by requiring people to pay a small minimum payment and then tying in health savings accounts, HSAs, basically people who switch to lower premium marketplace plans could direct the difference in premium costs into those tax advantaged savings accounts funded with their subsidy dollars. And, and that's just been really interesting to hear the President, I think, tweet about, say out loud these, these last few weeks is describing the, the insurance companies, which of course really ACA in that business, calling them money sucking insurers and saying that instead of this money going to the insurance companies in the form of subsidies, this money should be flowing to consumers I guess in the form of, of HSA deposits and things like that. So it's interesting where, where the President is going and taking more of a populist approach where neither party is really a fan of, of the insurance companies right now, but then also just the, the, the rock and a hard place that the Republican Party is in when it comes to these subsidies because at the end of the day premiums are going to skyrocke.
- [05:32]
A
You know, and here's a couple fascinating takes on this and I'm trying to piece this all together because regardless of the subsidies for those that are not buying the health care through the ACA or through these exchanges, rates are surging no matter what. Those seem to be going through the roof almost no matter what. So you've got that issue. So now we're talking about that category of people that are getting subsidies. And this is an incredibly complicated spot. You say rock and hard place. I think that's exactly right. The people that are getting subsidies need those subsidies. At the same time, the many, many people on the left and right think the insurance companies just sort of get richer and richer through the subsidies, that it really ends up being a benefit that goes through the insurance companies. But I guess in some ways from a Washingtonian perspective, it's too complicated to parse through all this. And then President Trump was trying to hit this down the middle some way or shape or form by saying we're going to increase the amount of income you have to have to have eligibility for this or decrease it. So it made it harder to be eligible for the subsidies. And that was his sort of seemingly his trying to assuage the right wing of his party. But it does seem like we're in a rock and a hard place because you please the individuals, get the subsidies, but you also please the insurance company. I saw yesterday, for example, Oscar health went up 20% on the news that there might be some kind of deal around this, which is, you know, Oscar might be a smaller insurance company, but nobody loves to see the insurance companies getting rich. How do you sort of parse through some of these issues?
- [07:08]
B
Yeah, I mean, I think. And what you're pointing to, and what I've heard a lot of people in the industry talking about too, Scott, is that to your point? Yes. It's either you get the subsidies or you don't. You get the enhanced subsidies or you don't, depending on your income level or your family's collective income level. But the greater problem here is that the insurance, the products being offered on these marketplaces are just too expensive for most people to afford without the federal government literally throwing money to subsidize them. And I think. So that's the overarching problem that just isn't going away here. Even if these things are extended for two years, that these health insurance plans are too expensive, that people cannot afford them as they exist on their own. And that doesn't really seem to be a problem that, that the Congress is capable of, of attacking right now without the only solution apparently being, you know, this, this Band Aid solution of, of having the enhanced subsidies. So it seems as if it's just a problem that is not going to go away regardless of whether what happens by the end of this year or not. But what I also think is interesting in terms of what we're seeing, how we're seeing the insurers respond and actually tell us directly, you know, the largest one, UnitedHealthcare, they're not the largest ACA insurer, but they are the largest health the country because of the employer coverage. But they're, they're raising rates 25% on their ACA plans across the 30 states. They, they offer them next year and expect their enrollment in that business to decrease by about 2/3. So one of the largest ACA carriers is literally expecting 2/3 of their enrollment to disappear without these subsidies in place. And that means that the pool that then stays. It just, it's, it's going to be. The risk pool changes people either. It's, it's a worse risk pool. It makes it more expensive for the people who are still there. It's just a downward spiral as these, as these subsidies go away, if they go away. So it's. So that's another, I think, rock in the hard place that the entire country is in is these subsidies really are a Band Aid solution to the fact that this is just an unaffordable product to start with. But if they don't exist, then you get this downward spiral where the, the insurance becomes even worse as it stands now. So yeah, it's a tough one and I think that's again, that's why we're really not see any hard solutions emerge because you know there's going to be some hard.
- [09:33]
A
But I think your point, your point is so well taken that the subsidy is however you handle this is a band aid and I'll be an important band aid for a lot of people but it doesn't solve the ultimate cost or supply demand issues that we have in health care. So it's sort of you could do these subsidies forever. We keep on driving up the cost of health care without making it affordable and quite frankly without improving access and ultimately the harder problem of Congress solving supply and demand here or new ways of dealing with health care seems to be a really, really big and real challenge, but not one that's easy to solve or that people really want to put their heads together and try and problem solve around.
- [10:14]
B
Yeah, well, and one thing I think too is interesting about all of this Scott, is that another macro context of all of this is that we have a completely different economy in workforce nowadays in terms of are retiring earlier. So many more people are self employed or freelance compared to decades past. And so you to, to your earlier point, we need a coverage option available for people to purchase at an affordable price because that is how our, our modern workforce operates. But at the same time like I said, you know, this isn't, this isn't affordable. And so you know what's, what's, what's happened in the past under the Trump, first Trump administration. We saw ICRA come out under the ACA where instead of that traditional employers could offer that, that tax free advantage so that instead of going to the insurer purchasing the plan for everybody, they then give, they, they basically reimburse the premiums money for each, each employee to go to the ACA in their state and purchase individual health coverage. And, and again that was set up by the Trump administration in 2019. And so they're almost sabotaging that in a way their own alternative to the traditional employer sponsored insurance model because this risk pool on the ACA is probably going to get worse. These premiums are going to get more expensive. So there's an alternative out there ichra and again set up under the Trump administration the first time and it's, and that's that alternative is going to become less appetizing if these subsidies don't continue to exist. So I think that's another piece of all of this as well is that, you know, we do need that option for people in this modern workforce and the Trump or the first Trump administration provided that. And then now it's, you know, you know, that's also kind of seen some, some issues potentially in the future too, all tying back to the, this subsidy conversation.
- [12:05]
A
I think your point there, Jacob, is really such an important point that if traditionally so many people's insurance was tied to their employers and we're moving so much more to a world where people are full time W2 with a specific company and not, not quite as engaged in getting that type of health care insurance coverage, these other alternatives of buying insurance directly are so important and so expensive and so challenging. Jacob, I know we've got to wrap up today. I could talk to you for hours, quite frankly, but, but this is really interesting and really helpful. I'll work with Chanel to get this episode out very quickly. Again, Jacob Emerson with the Becker's Healthcare just brilliant. Covers the payer world. Thank you for joining us today on the Beckers Healthcare podcast.
- [12:53]
B
Thank you, Scott.