Are the ACA exhanges in a "death spiral"?

Background Information

Debate Question:This is what a short summary question would look like.

Critics of the Affordable Care Act have long claimed that the clearest evidence of the ACA’s failure is the fragility of the state exchanges: they’re struggling to attract healthy young people, premiums are climbing, and insurers are dropping out. However, advocates of repairing the ACA argue that a few key administrative changes, along with the cooperation of insurance companies, could fix the biggest problems plaguing the ACA.
in favor
against

First and foremost, premiums are rising: in 2017 they are increasing at the fastest rate yet - an average of 25%.

Zetema PanelistZetema Panelist In Favor
  • +8 Good Point

Yes, rising premiums are problematic. However, tax credits are rising too, so most consumers wouldn’t see high growth in their net premium expenses under the ACA.

Zetema PanelistZetema Panelist Against
  • Good Point +8

Neither the feds not the states have spent enough to enroll young healthy people, nor are they likely to.

Zetema PanelistZetema Panelist In Favor
  • +8 Good Point

Exchanges can attract healthier people through better benefit designs, such as California’s silver plan with no deductible for doctor visits.

Zetema PanelistZetema Panelist Against
  • Good Point +8

That’s California. It was never realistic to assume that smaller states could successfully run an exchange. Many states lack the staff, skills, and marketing resources to do this.

Zetema PanelistZetema Panelist In Favor
  • +5 Good Point

Making the ACA work requires an investment from the states. Successful markets require scale and ongoing marketing; exchanges would work better if they cover at least 100K lives and if they invest substantially in marketing, as demonstrated by the states that did so.

Zetema PanelistZetema Panelist Against
  • Good Point +5

Many insurers can’t make money and so are withdrawing altogether; in 2017, just 57% of exchange enrollees will have three or more insurers to choose from, down from 85% of enrollees in 2016.

Zetema PanelistZetema Panelist In Favor
  • +5 Good Point

Yes, insurers have lost money, and those losses could have been corrected with ongoing participation in the exchanges. We know that some insurer withdrawals (like Aetna’s) have been wholly politically motivated. Aetna even pulled out of states and counties that had been profitable, presumably to teach the DOJ a lesson.

Zetema PanelistZetema Panelist Against
  • Good Point +5

Regardless of why insurers are pulling out, the original design ignored principles of actuarial science, combining rich benefits with restrictions on risk selection—a recipe for financial disaster!

Zetema PanelistZetema Panelist In Favor
  • +5 Good Point

Yes, risk selection is a common problem in smaller markets; smaller states should have either banded together or used the federal exchange for their residents.

Zetema PanelistZetema Panelist Against
  • Good Point +5

Together with poor selection in risk pools, the deck was stacked against insurers being able to make the numbers work.

Zetema PanelistZetema Panelist In Favor
  • +5 Good Point

These problems could have been solved with modest modifications to the exchanges along the way, but Republicans in Congress would not allow that.

Zetema PanelistZetema Panelist Against
  • Good Point +5

What do you think?

Are the ACA exhanges in a "death spiral"?

Are the ACA exhanges in a "death spiral"?

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