Thune Ignores ACA Reality: Marketplace Premiums Cheaper Than Employer Plans

Senator John Thune (for whose health insurance his employer—we the peoplepicks up over 70% of the tab) says that high health insurance premiums show that the Affordable Care Act has failed.

Research says the Affordable Care Act is delivering lower premiums than employer-based coverage:

…overall, the premiums are lower than those paid by workers for their company-sponsored health insurance, the [Urban Institute] team found.

“In 39 states including the District of Columbia, the average 2016 second-lowest-cost silver nongroup premium (the Marketplace ‘benchmark’ premium) was lower than the average employer-sponsored single premium when using the actuarial value, utilization, and age-distribution adjustments,” they wrote [Maggie Fox, “Obamacare Doesn’t Cost More Than Other Health Insurance, Report Finds,” NBC News, 2016.09.20].

Premiums are rising, but further research shows that trend predates passage of the Affordable Care Act and is exacerbated by employers shifting costs to employees:

…a second report from the Kaiser Family Foundation shows that health insurance premiums were headed upwards even before the Affordable Care Act forced these changes.

And employees are paying a bigger share.

“Covered workers’ average dollar contribution to family coverage has increased 78 percent since 2006 and 28 percent since 2011,” the report reads. “Premiums for family coverage have increased 20 percent since 2011 and 58 percent since 2006.”

The report finds that the average family premium for employer-sponsored health insurance rose 3 percent between 2015 and 2016 [Fox, 2016.09.20].

The only failure on this table is Senator Thune’s failure to offer any viable alternative to the Affordable Care Act… or, more importantly, his unwillingness to get over President Barack Obama’s victories and work with the President to make the Affordable Care Act better.


30 Responses to Thune Ignores ACA Reality: Marketplace Premiums Cheaper Than Employer Plans

  1. Let’s remember that besides covering uninsureds, the goal of the Affordable Care Act was to “bend the curve.” Health insurance premiums were going up 10+% a year, and the ACA wanted to slow down the rate of increase. So Thune’s demagoguery about costs going up is just that. Costs were going up far greater than the rate of inflation before ACA, and it was unrealistic to expect the ACA to bring premiums down as opposed to cutting the rate of increase.

  2. Let’s also remember that Thune’s plan was the status quo. Don’t cover the uninsureds. Don’t do anything to cut the rate of increase of health insurance costs. And prohibit the government from negotiating prescription drug prices with pharmaceutical companies for the Medicare prescription drug plan. It’s easy to sit on the sidelines and take potshots at someone who’s trying to accomplish something. Potshots are all Thune has to offer.

  3. This piece is misleading. As of February of this year, roughly one quarter of employee based health plans met the criteria for High Deductible Health Plans and 90% did on the individual marketplace. The premiums may be similar, but individual marketplace folks get raked over the coals if they actually need medical care. Source is the Robert Wood Johnson Foundation at http://healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_152.pdf

    Even if there is cost sharing through HSA and other means, Silver and Bronze marketplace plans have deductibles of $2500 and $5300 for an individual, respectively. Do better, Cory.

  4. Darin Larson

    And during the time that Thune and his ilk have voted to repeal Obamacare over 60 times, they have not passed one bill nor taken one vote on improving Obamacare.

    No one thought that Obamacare was the be all and end all. On the contrary, everyone knew that improvements and changes would need to be made as time went by and we learned what provisions worked best. Instead of a compromise to improve the law, the Republicans have vowed to burn it all down.

    All these years later, the Republicans still don’t have a plan to replace Obamacare. Going back to the old days of 25% insurance price increases each year and preexisting conditions that weren’t covered and where bankruptcy was commonly the result when someone became seriously ill. 18 million people have medical insurance that didn’t before Obamacare.

    Obamacare was a compromise. It was not perfect. We should have gone with single payer with the power of Medicare to negotiate fees for services and the price of drugs. Medical groups (picture Avera and Sanford) could bid against each other to provide medical services. Competition and the negotiating power of a single payer would bring costs down. Cost control is the weakest part of Obamacare because it wasn’t the focus of Obamacare. The votes in Congress weren’t there to make it the focus.

    But compared to where we were before Obamacare, Obamacare has been quite successful. How many years have passed and we are still waiting for that Republican plan . . . .

  5. Interesting.

    Note, however, that from the Urban Institute’s report, South Dakotans pay 7% more for a silver plan on the marketplace (after doing all their adjustments) than employer-based silver plans.

    However, whether the marketplace plans or employer mandated plans are “cheaper” than the other ignores the original question of the increase of rates.

    From Kaiser (a heavy hitter in health policy, and unashamed supporter of the ACA):

    While we cannot generalize to all states until more data become available later this year, in most of these population centers, the costs for the lowest and second-lowest silver plans are, in fact, increasing faster in 2017 than they have in previous years. Based on insurer rate requests, the cost of the second-lowest silver plan in these cities will increase by a weighted average of 9% in 2017. Last year, premiums for the second-lowest silver plans in these areas increased 2% following review by state insurance departments. There is substantial variation across markets, with premium changes for second-lowest silver plans ranging from a drop of 13% to an increase of 25%. Premiums for 2017 are still preliminary and could be raised or lowered through these states’ rate review processes.

    We also find that some states will have fewer insurers participating in 2017 than participated in 2016. On average across these 17 marketplaces, participation is down from 2016 but similar to that of 2014. In the 17 marketplaces included in this analysis, 7 states will see insurer participation remain steady or increase, while the other 10 states will see a drop in the number of issuers, in many cases due to the withdrawal of UnitedHealth.

    An average 9% increase in premium plan costs is NOT good news.

  6. Something came out recently that’s making me second-guess single payer; people with private insurance are more likely to have cancer diagnosed at earlier stage of incidence and have better survival outcomes than those without insurance or on Medicaid. I’d be curious to see about Medicare.

    Keep in mind, the studies did attempt to control for confounding variables like demographic and clinical vectors.

  7. How much will photo op get in retirement can somebody answer this for me.I know a one term senator get 17 grand a year starting at 62,That is a Senator serving a one year term.

  8. Wrong a one six year term.

  9. Wayne B, please read your links and you will get your answers. “Though the Medicaid patients fared worse than the uninsured patients in this regard, that might be because, until recently, some of them, too, had been uninsured, the researchers say, and only enrolled in Medicaid after their cancer was diagnosed.”

    When you already have cancer it is pretty difficult to cancel the diagnosis of it. The thing that makes all health coverage so important is the wellness benefits of the programs. Medicare has a Welcome to Medicare wellness preventive visit for free! Woo woo, the advantage of being an old fart and making it Medicare. After that, you get a free on each year as well as a questionnaire called ” A Health Risk Assessment” that helps your provider establish a prevention plan to keep you around with a quality of life thingy going for you.

    Ask any recipient of Medicare how they like it and how it is providing them with the best care possible, they will tell you that it is affordable and does the job. As I am a wounded combat vet with disabilities, I get both the Medicare A, hospitalization and the Veterans Administration. I use the VA for all my health needs.

  10. Jerry,

    The conjecture added by the author of the article wouldn’t address ALL the disparity, but I do admit it’s logical for some of the disparity to be caused by people without insurance getting Medicaid after being diagnosed.

    The studies, however, show that Medicaid patients don’t receive the same treatment regimens as those with private insurance, controlling for stage at incidence.

  11. Wayne B, I read stuff all the time, that is what I do. I have never read any indicators that Medicaid patients do not receive the same treatment regimens as those with private insurance. Can you please provide a link on those studies? In South Dakota, we have basically 4 companies that provide the healthcare coverage on an individual basis. Two of these, Avera and Sanford, also do the ACA Marketplace and have done so since the beginning. Dakotacare was purchased by Avera so it, in itself, does not do ACA enrollments any more.

    The State of South Dakota regulates the insurance premiums and either allows companies to increase the premiums or adjusts them to their loss ratio’s. Thune says the ACA has failed, how can that be when it is regulated by the state? As the state regulates premiums to loss ratio, then it would make the most sense to say that it is the state that has failed its citizens, if we are to believe Thune. My statements make the same sense as Thune’s then, would you agree?

  12. Trio of studies that show Medicaid patients do not receive the same quality of care that those with private insurance do: https://consumer.healthday.com/cancer-information-5/breast-cancer-news-94/medicaid-patients-get-worse-cancer-care-studies-contend-688451.html

  13. mike from iowa

    Marlboro Barbie got his way, premiums would be hundreds of dollars higher in the hands of all private insurers. Then there would be even more Medicaid/Medicare fraud.

  14. Jerry,

    Links to the abstracts are within that NPR article.

    Let me see if I can’t get past the paywall on those articles; the abstract is really brief on them but indicates uninsured/Medicaid patients didn’t get certain procedures that private insurance patients did.

    The ACA sets a medical loss ratio of 80% (80 cents on the dollar must go to health care costs). It’s true that the states must approve rate increases above 10%, but it’s not as though the state truly has power. Perhaps states can shave a little of the rate increase, but if they’re too aggressive in limiting the rate increase, the insurer just drops that plan rather than lose money on it.

    http://insurancenewsnet.com/oarticle/losses-widen-for-health-insurers-in-minnesotas-individual-market

  15. What this keeps telling me is that the poor have no experience with their healthcare because of their status. The article here goes to the point that the Medicaid patients have other health conditions that rival the cancer and that in general, it is the lack of information and understanding from providers that cause the poor results. Folks that have always had insurance are more likely to have used the wellness benefits applied to their coverage, poor folks have never had that luxury of being able to have much care whatsoever.

    I would ask Dicta as well as Wayne B to ask themselves a question or two. If the results of these studies indicate that there are these poor results, what mechanism does the state of South Dakota have in place to make the results better? As this is a partnership with state and federal resources called taxpayer dollars, could the results we are seeing are caused by the fact that we do not have a system in place that covers you like a Medicare for all? Thune can blather all he wishes about the marketplace and so on, but when he does, he indicts himself as well as the party in power here in South Dakota for their own failures in the entire process for not being able to deliver low income healthcare at the Medicaid level.

  16. The death spiral is what you are speaking of by dropping a plan and moving to another one. As far as I can tell, Avera and Sanford both have the same plans they originated with regarding the ACA. My understanding is that Wellmark is coming out with a new plan that will cost the same as the old plan but I am told they want you to go to it so that, who knows? The state truly does have the power as those rates must be blessed by the insurance division.

    If the plan is loosing money, why do they keep writing it? If they drop the plan, so what? The consumer would then move to another company or another plan. All plans must have the same the same Actuarial Values http://obamacarefacts.com/health-insurance/actuarial-value/

  17. Roger Cornelius

    John Thune uses repealing Obamacare the same way Stace Nelson uses abortion, to get votes.
    John Thune should know that repealing Obamacare would be a extremely difficult task and perhaps impossible, but he says it anyway to place outrage among voters.
    And Stace Nelson knows he is isn’t going to get Roe vs Wade repealed by shouting in the rotunda of the state capital.
    John Thune is a political whore who in nearly 12 years hasn’t accomplished anything but his obstructionist agenda.

  18. Brookings has another take on the premium differences https://www.brookings.edu/research/affordable-care-act-premiums-are-lower-than-you-think/

    Individual health plans now include dental for your children as well as vision for your children. That is a big deal, but it is also something that you pay for. There are no waiting periods for treatments of health conditions, nor are there pre-existing conditions that would deny those cancer treatments. Thune does have an alternative, and it already exists, we call it Medicare.

  19. This is circular and you can literally never lose the debate with the trap you’ve set.

    1. Debate begins that private options are superior to public ones
    2. You say give me evidence
    3. We provide evidence
    4. Well why doesn’t the government make it better than, so you lose #1!

    We’re literally talking in circles at that point.

    I

  20. We have a superior plan to everything, we call it Medicare. It works surprisingly well Mr. Dicta. That makes the statement that public options are much better than private ones. I think I said that so that means I am not speaking in circles, I am speaking to proven facts. I have the satisfaction of being in two public options, Medicare and the VA. They are both marvelous.

    What metal plan do you have Mr. Dicta? How much ya paying for that? Here is how Medicare works for those who are 65 and older or on disability. You pay $104.90 per month for your Part B, you can get a Medicare supplement $74.00 per month, according to a flyer that I received. The drug plan costs $29.00 a month. For that, if I choose it would be $200.00 per month. You could get office visits, hospital stays, durable equipment, the whole 10 yards. What is there not to like about a fixed plan like that? They say that there are a lot of us as well that are in that 65 and over range and more coming each day. Why not let everyone have a bite of the apple? It is not free, but it is one helluva lot easier to pay for than $1,000.00 bucks a month for a private health plan with a $5,000.00 deductible and no office visits or prescription drug plan, for a single non smoker.

  21. Some observations:

    1) Because Medicare is universal for those age 65 and above, we don’t have a sizable privately insured population against which to compare health outcomes. Since it’s the only game in town for our seniors, we cannot know if a private alternative would mean better health outcomes.

    2) Medicare is financed primarily through FICA taxes; the out of pocket costs you pay, Jerry, are reasonable because we earners are paying the lionshare of the “premiums”. If everyone were to pay what you pay, our FICA taxes would have to increase to cover the gap. (I’ll concede that’s probably not as big a deal, since our insurance premium expenses would disappear under a single payer system, but we’re then having people pay in based upon what they make rather than their health risk factors like smoking, etc.)

    3) Expanding Medicare for all may not be a viable solution. A growing number of physicians are not accepting new Medicare patients because of the low reimbursement rate (Kaiser’s 2015 poll revealed 21% said they wouldn’t take on new patients). Low payments + regulatory burdens = not worth the hassle. If those payments become the norm, then we risk having fewer doctors entering the workforce (especially specialists who take on much more debt and time spent specializing).

  22. Thanks Wayne B. 1. $200.00 a month is a pretty healthy incentive for complete coverage
    2. One size fits all works very well in every industrialized country in the world. BTW, you can also purchase private insurance in those pesky over the pond countries as well as Canada.
    3.That was before the doc fix passed http://www.ibtimes.com/doc-fix-2015-obama-signs-214-billion-medicare-legislation-doubts-remain-1883130 now docs know what they can expect to be paid and they know they will be paid promptly
    4. http://kff.org/medicare/state-indicator/total-medicare-beneficiaries/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D There are lot of folks right here in South Dakota that are on that public option called Medicare. It works and they love it man. Call Thune and tell him to kick it up a notch and get on board the healthcare fix for all or get the hell out of the way and let my man Williams take the lead.

  23. Wayne B, here is some information about the division of insurance approvals of rate increases http://www.ncsl.org/research/health/health-insurance-rate-approval-disapproval.aspx

  24. We have a superior plan to everything, we call it Medicare.

    Jerry, one problem and the reason why it will never happen in this country with out a revolution of some kind, Medicare for everybody would cut those huge insurance company profits, for this reason alone you guy’s argument is moot.

  25. Tim, I never thought that there would be an ACA plan, but here we are. What I see is less griping about the ACA, except by out of touch politicians like Thune, for example. They speak to hear themselves and are caught up in an election that happened 8 years ago. This makes sense because they have not done a damn thing since then. I see the Dems are pushing for a public option now and I see the insurance industry digging in. We have seen it before and they lost. The public is not so against the ACA as it once was because more and more people find they actually need a guaranteed issue and they need to have the essential health coverage…just like Medicare. Moot rhymes with boot and that is what is needed with Thune. Something very important to think of is that the Black dude that put the thing in play is not gonna be there next year to bitch about. So there is that.

  26. The public option single payer is already here Tim, Thune knows it as well as everyone else knows it. He is padding his wallet as there may be some limits to what is going to be coming into that wallet if a few ballot thingys go against him.

    Medicare 53.8 Million

    Medicaid 6.5

    TriCare (DoD retirees) 9.4

    Affordable Care Act 16.6

    CHIP 8.4

    Federal Employees 9.0 Million

  27. Everyone seems to be ignoring the elephant in the room – cost of care. The Epipen price scandal is one example. The key to lowering medical insurance premiums is price control. It’s not a new idea and its not un-American. We used them on gasoline, rent, and the minimum wage. Its time to consider them for pharmaceuticals and medical equipment.

  28. Big elephant Mr. Winegar, I forgot to list the VA as the other market for single payer. The VA treats millions of veterans, myself included. The elephant in the rooms got neutered by the VA as it is the only medical treatment provider that negotiates with the drug companies and medical equipment companies for lower prices. The only one. The same drugs we take here are a fraction of the cost in Europe and in Canada or Mexico.

    EpiPen is just one of many, Nexium brand name is another. Go to a pharmacy and ask for the prescription of this product $400.00 for the script. You can then go to the over the counter shelf and buy the same for a twenty dollar bill or less. Folks with private insurance will pay that 400 bucks without thinking because they get it for 20 bucks or less on a co pay. No one asks a question about it because they do not see this as a problem, 20 bucks is 20 bucks right? No one gets hurt in the deal. The price of the insurance goes up and they wonder why. There total lack of curiosity and ignorance is blamed on Obama, while Thune perpetuates it. At this point, after over 50 attempts to vote the ACA down, it is still here. We must ask ourselves, how much money is Thune getting in his pockets for this obtrusive behavior?

    Go into a hospital and have a procedure done. How much does it cost? Who cares, the insurance company will pay it, right? Get the bill, why read the thing, the insurance company has it covered, doesn’t matter what it says. Price control is the smart and conservative way to take care of it Mr. Winegar, you are so correct on this very simple observation. We should all be in agreement on where the problems lay, now we need leadership to solve them. It is good that you can see the problem Mr. Winegar and I hope that you get elected to be able to do something about this at the state level.

    Thune should actually be a conservative and present solutions to the problem at hand, but alas, he is no more of a conservative than the man in the moon. Thune is a grifter that is in it for the money and he is doing well with contributions from outside of the state to keep his grift alive. Standing on the sidelines and talking to himself are not ways in which to solve healthcare premium costs. Thune is supposed to be the number 3 man in leadership of the senate, not the tall guy in a photo ops. Then we hear this from him, what a complete failure of representation Thune is. He should put half of his ill gotten gains back into the state of South Dakota and ask for forgiveness for being a part of the biggest failure since the republic began, our current congress.

  29. Thune knows nothing. He is clueless. Loves the free market, but just having two insurance companies in South Dakota, doesn’t raise a red flag to him when it comes to “climbing” premiums?

    Where was Mr Thune when premiums were climbing pre-Obamacare? I must have been absent when he expressed his outrage in those days.

    He keeps saying over and over that they will replace it. With what? And why do we, and the media, give him a pass on never presenting what he would replace it with?

    I don’t have any patience with this guy. The only reason he keeps going back to D.C. is because South Dakotans aren’t stopping it. Lots of folks like to bit** about the President and how things operate in D.C. Fine. But it truly it is the folks that Thune and Noem, continually obstructing, that has caused D.C. to be so dysfunctional. But low info folks would rather blame it on the President, than realize that the true sources of the problems are our senators/congress – both in D.C. and locally.

    No, the ACA isn’t perfect. But for these folks to not work on and improve what was there, is horrible. Many lives lost, many lives impacted negatively by their political obstructionism.

    That’s why I have ZERO patience for the Thune’s, Noem’s, and Stace Nelson’s of the GOP who like to tout their pro-life stance, yet do nothing to improve the health care accessibility for everyday Americans.

  30. Porter Lansing

    Insurance premiums are rising because Republicans have convinced enough young males to pay the penalty because Republicans are going to get the whole thing tossed out before the penalties really hurt. It’s time to triple or even quintuple the penalties. Free Riders are a large cost to our fragile medical paradigm and should not be allowed. As an anecdote, I ignored health insurance until I got married and Mrs. Lansing informed me I wasn’t going to jeopardize her future by having a debilitating accident and putting us in the hole for decades. I assume most young males have the same mindset and need to be prodded, if not pushed into buying a policy. One bad snowboard accident and a kid will be on public assistance for millions of bucks.