NC State Economist Mike Walden – “Problems with the Affordable Care Act”


Mary:  I’m Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program looks at problems with the Affordable Act.  Mike, recently a major insurer in North Carolina announced they were examining whether to continue participating in the Affordable Care Act.  The Act – also known as Obamacare – was enacted to expand health insurance coverage to millions of households who previously did not have coverage.  Why would any insurer decide not to participate?

Mike:  Summary Answer

  1. Some insurers have left
  2. Reason – some insurers have evaluated that costs associated with ACA are greater than the revenues
  3. Two issues
  4. One – ACA had hoped to contain costs – especially by motivating participants who used high cost emergency rooms to use regular doctors
  5. Some studies show this isn’t happening to the degree expected – and so costs to insurers aren’t being contained as much as thought
  6. Second – need young healthy individuals to participate so their revenues will help offset the higher costs of older participants
  7. Some data indicate that signing up 26-35 aged individuals (near young) has not met expectations
  8. Bottom line – finances will determine if an insurer stays
  9. I’m MW

Mary:  And I’m Mary Walden for the North Carolina Cooperative Extension Service