ALBUQUERQUE, N.M. — Terry Linton, who has owned his own insurance agency in Albuquerque for 28 years, decided to become an expert in the Affordable Care Act when it became law in 2010.
Linton sells health insurance to businesses and individuals, and he was painfully aware of the price New Mexicans paid in the years before the ACA for having an uninsured population that approached 25 percent of the state’s residents. If the new federal law, also known as Obamacare, could help, Linton wanted to learn about it.
“New Mexicans needed answers,” Linton said in an interview. “They needed solutions. I was hoping for cost-effective solutions for my clients.” For Linton, the ACA is just another tool in the insurance agent’s toolbox. If he has a political opinion about the law, he keeps it to himself.
It is six years later, and Linton has seen the tool in action. Here is what he learned:
• On the plus side, many more New Mexicans are covered, thanks to an expansion of Medicaid benefits to able-bodied, working-age adults and to ACA restrictions on insurers’ ability to deny care based on pre-existing medical conditions and other factors. New Mexico’s uninsured population has dropped to 14.5 percent since the ACA was enacted.
• The law is much less clear than he was hoping, and the regulatory burden on business customers is greater and more expensive than anticipated.
• Insurance remains unaffordable for some, partly because rising health care costs continue to punish our economy. The government’s promise to “bend the cost curve” and slow the growth in health care costs remains just a promise.
• Insurance premiums for small businesses are increasing in New Mexico – but for reasons that have little to do with the ACA. Linton says small businesses are seeing premium increases of 20 to 25 percent, even if they don’t buy insurance on the state’s exchange.
• Small employers are responding to rising prices by “diluting” the coverage they offer, Linton said. Copayments go up, employee out-of-pocket spending goes up and benefits are reduced. Employers aren’t happy doing it, Linton said, but some have no choice.
Litton said the government led people to believe that competition in the insurance markets, larger pools of insured people and ACA-mandated payment reforms would slow the growth in health care costs and insurance premiums to single digits. That hasn’t happened. Linton doesn’t blame the ACA entirely, though he criticizes Washington for setting unreasonable expectations about cost control.
One problem is that “there are so many fingers trying to grab the health care dollar,” he said. “Hospitals, providers, insurance companies, agents, attorneys.” All have a legitimate claim, he said. Physicians have to pay their medical school bills. Hospitals need to pay for their new wings.
Another problem is that patients, in general, demand more care than they need, partly because they don’t know what care really costs, Linton said. Some may think a drug that costs thousands of dollars a year really costs only what their copayment is. Those pricing distortions and a culture that encourages Americans to expect quick and easy solutions help keep prices up, he said.
Linton said the solution to bending the cost curve is probably smarter purchasing of health care.
The ACA introduced unexpected complexity to the health care marketplace, as well. “Nobody knew how horrendous the reporting requirements would be for employer groups with more than 50 employees,” Linton said. His clients have had to hire people or buy services from other companies to comply with the law.
The biggest complexity comes when it’s time to decide which employees are full time and, therefore, must be offered coverage. Linton said the law appeared fairly straightforward, but by the time the regulatory agencies wrote the rules to implement the law, the complexity was out of hand.
The computerized insurance exchange that was supposed to help individuals and small businesses find affordable insurance plans “has been a nightmare. It’s painful to enroll” on the federal exchange website that New Mexicans use when they want to buy individual insurance. Linton recommends that only people who are certain they will get a subsidy that helps them afford insurance use the exchange. Everyone else can buy the same coverage through a broker with much less hassle.
The ACA demonstrated “there is no silver bullet” when it comes to health care finance, Linton said. “It has done good things. It has helped Americans. But it didn’t make care for employed Americans more affordable.”