While funding for health care in the United States comes in a variety of forms depending on the patients age and ability to pay. Medicare is the way seniors and the disabled access health care. The healthier the population is when it arrives at the age of Medicare eligibility, the easier it will be for Medicare to provide coverage. That means that providing a way for Americans to access health care before they reach the Medicare eligibility age is an important factor in strengthening and securing Medicare for the long term. As this article points out, repealing the Affordable Care Act is a bad idea for both the short and long term.
But when the time came to pay up for risk reduction in the Obamacare exchanges, Congress reneged and paid only 12% of what was owed to the insurers. So, on top of the fact that the companies had to bear the risk of unknown costs and utilization in the startup years, which turned out to be higher than they expected, insurers had to absorb legislative uncertainty of whether the rules would be rewritten.
It is no wonder that this year they have dramatically increased premiums, averaging 20%, to compensate for the extra risk they didn’t factor into the original lower rates. In contrast, underlying health costs are rising at about 5%.