This is Scott Becker with the Becker Healthcare
podcast.
Today is is one of my favorite parts
of the week. I get to speak to
Jacob Emerson.
Jacob covers at Becker Healthcare the payer universe,
the payer landscape.
And and one of the things I love
about talking to our different lead journalist
and brilliant people like Jacob Emerson is I'm
hoping that I learn what our audience learns
what's going on in the payer world, and
that's the world he covers.
Jacob, I'm gonna tee it up. I'll ask
you to take it away. What are the
couple of things that you're watching closely in
the payer world currently?
Sure. It's it's good to talk with you,
Scott. It's it's been too long since we
last chatted, but I, 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. You know, of
course, it's it's been in the the spotlight
politically because it's what the shutdown,
hinged on. And there, of course, has been
no solution legislatively
to to what's gonna happen to these subsidies,
and 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
the next year in terms of, you're gonna
see they're gonna 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,
arise in uncompensated care as people just, don't
purchase the 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 November.
Certainly. And one of the things I found
fascinating is president Trump seemed to sort of
wanna find a way to meet this in
the middle Yeah. And continue some of the
subsidies for a couple years.
And and, of course,
this was met
maybe with applause on the left and absolute
hatred on the right, where where it seems
like almost people on the right are are
so excited to get rid of these subsidies
for right or for wrong. There's all kinds
of thoughts on whether this is these are
good or bad. I think all of us,
at least in health care, believe we should
have coverage for all. Were the subsidies or
the ACA the right way to get there?
I don't know. But 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 where president
Trump got in the front then saying, okay.
Let's continue this 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. 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's enrolled
or 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 uninsured 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 weighing issue as we head into midterms
next year. So there's that side of it,
but then, of course, there's there's 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 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 and 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
hard line conservatives that do not want any
kind of extension,
made to to the Affordable Care Act, moving
forward. They wanna 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 the fraud issues
that Republicans,
have really been flagging these last few years,
by requiring people to pay a small minimum
payment,
and then 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 advantage 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 benefit from from the ACA, in that
business.
They're 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 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 gonna skyrocket
without these.
And, you know, it's gonna have public because
I can see that. No. No. No. And
here's a couple of 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 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 gonna increase the
amount of income you have to have to
have eligibility for this or or decrease it.
So that sort of made it harder to
be eligible for the subsidies. Now it's just
sort of seemingly his trying to swash the
right wing of his party.
But 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 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, it's
in Alaska, it 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?
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
the the to to your point, yes. It's
either you get this subsidies or you don't.
You get the enhanced subsidies or you don't
depending on your your income level,
or your family's collective income level. But the
the the greater problem here is that, that
the the insurance the products being offered on
these marketplaces
are just too expensive for most people to
afford, without the federal government's,
literally throwing money,
to to subsidize them. And I think so
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 that people cannot afford them as they
exist on their own. And that doesn't really
seem to be a problem that,
that that the congress is capable of,
of attacking
right now without, the 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 how we're seeing the insurers respond and
actually tell us directly,
the largest one, UnitedHealthcare,
they're not the largest ACA insurer, but they
are, the largest health insurer in 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 two thirds. So one one of the
largest ACA carriers is literally expecting two thirds
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 gonna 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 the entire country is in is these
subsidies are 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 as it stands now. So,
yeah, it's a it's a tough one. And
I think that's, again, that's why we're really
not seeing any
hard solutions emerge,
because,
the you know, there's gonna be some,
hard But but I think your point your
point is so well taken
that the subsidy is whoever you handle this
is a band aid, and and I'll be
in 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 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 and, ultimately, the harder problem of congress
solving supply and demand here
or or new ways of dealing with health
care seems to be a really, really big
and real challenge. Yeah. But not one that's
easy to solve or that people really wanna
put their heads together and try and problem
solve around. Yeah. Well, and and one thing
I I think too is interesting about all
of this, Scott, is that another macro context
of of all of this is that, you
know, that we we have a completely different
economy in terms in workforce nowadays, in terms
of people are retiring earlier, so many more
people are are self employed or freelance,
compared to decades past. And so,
you to into your earlier point, we need,
a 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 group policy,
employers could offer that that tax free advantage
so that instead of going to the insurer,
purchasing a 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 the the this risk pool on the
ACA is probably gonna get worse. These premiums
are gonna get more expensive.
So there's an alternative out there, ICRA,
and and, again, set up under the Trump
administration the first time.
And it's and that's that alternative is is
gonna become,
less appetizing
if these
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 in this modern workforce,
and and the Trump or the first Trump
administration,
provided that. And then now it's, you know,
it that's also kind of, seen some some
issues potentially in the future too, all tying
back to the this subsidy conversation.
I I think your point there, Jacob, it
it 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 aren't full time w two
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 a 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 Becker's Healthcare podcast.
Thank you, Scott.