- Health insurance has become unaffordable for far too many North Carolinians
- Obamacare and a myriad of other regulations have caused health care costs to explode
- There is, however, a loophole that state legislators can take advantage of right now to provide relief for skyrocketing insurance premiums
The Affordable Care Act (ACA), also known as Obamacare, has been a disaster.
Rather than becoming “affordable” as promised, health care costs have risen dramatically. Insurance premiums have skyrocketed even as coverage for plans has worsened.
The situation is so dire that Congress just concluded fighting about extending Covid-era enhanced premium subsidies that were tacked on top of the original subsidies. These subsidies are designed to mask the true cost of Obamacare exchange plans.
The expiration on January 1 of these enhanced subsidies caused ACA marketplace premiums to rise reportedly by an average of 26 percent for its 24 million enrollees.
Medical debt has become so bad in North Carolina that last year the state implemented a program to pay down $6.5 billion in medical debt for 2.5 million people.
With so many subsidies, regulations, mandates, and red tape coming from the federal government, it seems hopeless to try to untangle the web of bureaucracy engulfing American health care.
But what if I told you there was a policy North Carolina legislators could pass this session that would provide relief to North Carolinians struggling to find affordable health insurance?
Obama’s exemptions for U.S. territories
As Cato Institute’s health care expert Michael Cannon recently wrote, “In 2014, the Washington Postreported that officials in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the US Virgin Islands ‘have been warning for years that [Obamacare] would destroy their insurance markets.’”
In response, the Obama administration in 2014 “issued guidance clarifying that Obamacare’s costliest regulations — guaranteed issue, community-rating price controls, essential health benefits mandates, single-risk pool requirements, medical loss ratio requirements, and rate review — would not apply in US territories,” according to Cannon.
The ability to offer health insurance products that can avoid these costly mandates enables insurers in US territories to offer more affordable options for consumers. Moreover, according to Cannon, “Consumers and employers could enforce their insurance contracts in their home states with help from their home-state regulators,” so consumers who are wronged wouldn’t have to seek relief from faraway islands.
Cannon adds, “Many of the largest health insurers in the country already operate in US territories and have provider networks in the states. Consumers and employers could purchase coverage from the same insurer they do now with lower premiums and broader provider networks.”
The infrastructure is already largely in place; it’s just up to state legislators to act.
Other states have already filed legislation
As novel as this idea may sound to many, North Carolina legislators wouldn’t have to reinvent the wheel. Legislators in Florida (in 2023) and Kentucky (earlier this month) have already introduced such legislation, so bill drafters here can borrow language from those.
According to one estimate by KFF, North Carolina’s average health insurance premiums rank 22nd highest nationally and above the national average. State legislators don’t need to wait on acts of Congress to address the affordability problem.
Empowering North Carolina health insurance consumers with more choice — in particular, choices that are free of Obamacare’s most costly mandates — can provide relief at a time health care has become unaffordable for far too many.
