Amid turbulence in health insurance markets, some seasoned advice for reporters

Published on
September 21, 2016

Forgive yourself if you’re having trouble tracking coverage and other issues surrounding the Obamacare insurance exchanges.

Which insurers are in, which out? How many people have signed up? How many have dropped out? Who’s enrolled? Why too few young people and too many middle-aged sickies? Are the premiums soaring beyond reason or within the range of expectations? Are the provider networks too narrow, too wide, or just right?

Is the whole thing imploding or is this the normal turbulent evolution of a new, complex marketplace?

Those are just a few of the questions bouncing off the media walls in recent weeks, triggered primarily by Aetna’s surprise announcement that it would drop out of 11 of the 15 state exchanges in which it was participating by 2017.

Aetna became the third  major national insurer to indicate it was scaling back. What pumped that story up — and rightly so — was the appearance that Aetna’s decision was directly linked to the Justice Department’s challenge to the company’s $37 billion purchase of Humana. (Aetna to Feds: Screw you and your exchanges, too!)

And that added a new question to the ones posed above: Should the government step in to block big insurance company mergers to preserve a competitive marketplace? A corollary question: Do these large, powerful companies have any social responsibility to hang in the exchanges for at least a few more years to help address what was a 40-year-old problem (too many uninsured) and market failure that was largely of their making?

The Obamacare exchange story is tough to cover for many reasons. Here are some of the main ones. I offer some advice along the way, from the perspective of having covered health insurance for (a sometimes painful) 35 years.

Public antipathyAmericans don’t like thinking or reading about health insurance. They do so grudgingly and it makes them a bit angry, which flows into political ire for some.

Insurance in general is one of life’s boring necessities. But health insurance, in many people’s minds, deserves a special place in hell. Even people who get it at work, when faced with a few simple choices, resent having to pay attention to the details.

Surveys over many years have consistently shown that even college educated people have trouble comparing plans and understanding the interplay of deductibles, co-pays, co-insurance, provider choice and narrow networks, exclusions, and benefit limits. Heck, most people still don’t fully understand the difference between an HMO and a PPO, and they’ll rail against “managed care” even though we are all in managed care plans these days (and that’s good).

The Obama administration’s attempt to standardize benefits and make choosing easier in the exchanges through the Affordable Care Act was the right thing to do, and has largely been successful. Many employers are following suit. But this success has been overshadowed by the remaining bits of complexity, and the predictable resentment surrounding having to have and pay for health insurance at all. As a result, the progress achieved has been underappreciated.

Advice: Take the opportunity when doing exchange update stories to remind readers or listeners why they need health insurance at all, and that the exchanges are testing ways that consumers can shop for health insurance to improve their chances of ending up with a plan that meets their budget and medical needs. .

Political polarization. It’s hard not to fall into the trap of politicizing any exchange update story. Indeed, that’s the entire context of many stories. This is the case because of persistent Republican opposition to Obamacare. Thus, every glitch or piece of bad news about exchange coverage gets interpreted through the lens of that opposition. For their part, the Omama administration and Democrats often spin bad exchange news in a falsely positive light.

Lost in the spin from both sides is the truth. The ongoing debate about total exchange enrollment to date is an example. Republicans love to trot out a 2011 Congressional Budget Office report that projected the exchanges would enroll some 20 million people by now. With exchange enrollment at 10-11 million, critics say, “Obamacare is a failure.”

This is distortion. Sparing you the gory details, the CBO mostly got that projection wrong because it assumed more employers would drop coverage. They have not, and that is, for the vast majority of workers, a good thing. Moreover, Republicans wanted less disruption to established employer coverage; it was one of their main complaints when Obamacare was being debated.

Meanwhile, the Obama administration keeps saying healthy non-poor young people are going to flood into the exchanges any moment now. That’s unlikely. And the Democrats have defended the ACA’s low tax penalties for not obtaining coverage. It’s now clear they were too low.

Advice: Focus less on the politics and spin and more on the direct impact of changes in the insurance market on consumers and workers in your city, town, state. For example, what does the pullback by some of the large insurers and failure of the co-ops actually mean for coverage options? That varies widely by geographic area. And how do insurers’ networks compare in your neck of the woods?

The numbers are confusing. Aside from spin, tracking enrollment and premiums is not easy and various federal and state agencies do it differently. Stories confuse readers when the numbers from various analyses over time don’t match up.

Part of the problem here is that every summer and fall there’s a process in which insurers propose premium rates, state and federal regulators review them, and then final premiums are settled on before open enrollment begins. Stories early in that process, based on the proposed rate hikes, can be scary if the rates hikes are high. Not a few of those stories fail to mention the simple fact that insurers have strong motivation to initially propose significant increases. After all, it’s a sort of defacto negotiation. Actual rate hikes after this process are almost always lower (though for 2017 it looks like we are in for larger premium increases than last year).

In terms of coverage, some reporters have missed altogether mentioning “off-exchange” enrollment. That’s coverage obtained outside the exchanges by people who don’t qualify for government subsidies. Most off-exchange coverage is, in fact, “ACA compliant,” which means that the benefits and structure of the plans are very similar if not exactly the same as those sold in the exchanges.

You might be surprised to learn that off-exchange enrollment in 2016 is almost the same as on-exchange enrollment. About 10 million people are in exchange plans and about 7 to 8 million people are covered in plans whose design and rules were dictated by the ACA, which includes a ban on pre-existing condition clauses.

On a more meta budget level, confusion also persists around whether Obamacare is adding to or reducing the federal budget deficit. The confusion is partly political but it’s also because it’s not a simple thing to measure and the numbers can easily be cherry-picked.

Advice: Ignore this storyline for now and don’t buy into any facile statements about it. Unless of course you want to spend a week or more probing the arcane budget details. Obamancare was always going to cost money — out of your wallet and government coffers (also you, via taxes). But, bottom line: We get something in return for it.

Steven Findlay is an independent health care journalist, policy analyst, researcher and consumer advocate. He lives in Barnesville, Maryland.