New York Estate Planning & Elder Law Blog
According to a recent report by CNBC, over half of the revenue generated by the nation’s top five-insurance companies comes from federal government funds provided by Medicare and Medicaid., more than doubling since the Affordable Care Act (ACA) came into effect. Those insurers generated a combined $92.5 billion in revenue from CMS programs in 2010 compared to $213.1 billion in 2016.
Citing analysis from the journal Health Affairs, the article suggests lawmakers could improve the outlook for ACA healthcare exchanges by requiring companies that draw federal funds to offer plans through the ACA marketplace. Such a move could have promising outcomes, given the face that many insurance companies have pulled out of the ACA healthcare markets over increased operating costs.
UnitedHealthcare, Aetna, Anthem, Cigna and Humana reportedly draw 59 percent of their revenue from CMS programs while adding an estimated 23 million individuals to their plans over the same period. The same Health Affairs report also purports those five-major insurance companies have a combined 125 million members across the country and have been quite profitable since all Americans have been forced into buying health insurance coverage.
Most of the sign up gains reportedly came from the expansion of Medicaid, which covers disabled and low income Americans, as the ACA loosened eligibility standards and allowed states to expand their Medicaid coverage. With the future of the ACA and its healthcare markets in flux due to insurer pullouts and looming bills in Congress, it remains uncertain whether insurance companies will be forced into offering poor and elderly Americans affordable healthcare while they profit from other government programs.
Even though insurance companies have pulled out of exchanges in many states, providers still offer insurance to CMS beneficiaries in those same states have a chance to improve access for ordinary Americans by requiring companies to offer ACA plans. Whether or not that becomes the case remains to be seen as some lawmakers work feverishly to repeal many of the key pillars of the ACA.
Whatever the outcome, the federal government has been urging Americans to meet the deadlines for ACA signups in their states and avoid paying steep tax penalties for not having individual health insurance. Should the ACA be repealed at some point, older Americans would lose important limits on how much insurance companies can charge individuals over 50, which would drastically reshape the state of healthcare for people going into retirement.