Ann Marie Marciarille: Self-Insurance by Small Employers and the Possible Breakdown of Community Rating Under the ACA
Ann Marie Marciarille:
Missouri State of Mind: Self-Insurance by Small Employers Under the ACA: [S]elf-insurance in employer-sponsored health insurance is a riddle wrapped in a mystery inside an enigma… the explosive growth in self-insurance by employer sponsored health insurance plans is… under-discussed… the New York Times took it on…. explains… 59% of private sector workers with health coverage are enrolled in self-insured plans (up from 41% in 1998)… the exemption of self-insured plan from state health insurance regulation is not premised on any genuine absence from all insurance markets, the article explains about self-insured plans' participation in the stop-loss insurance market…. The stop-loss market responds by cherry picking among the new refugees on the basis of -- you guess it -- health status of the employee group, reintroducing underwriting by small group to places where it had been eliminated for individuals by the Affordable Care Act.
The moral of the story? Whereever and whenever we have competing insurance products whose profitability is determined by calculating every health care payout as a loss, the insurance markets will respond accordingly -- ever inventing more methods, even if once or twice removed, to screen those who need health insurance out of the health insurance marketplace.
Maintaining the pooling equilibrium as health care costs increase is going to be really hard. If it turns out to be impossible--well, then, the ACA system will lurch toward pay-or-play and then single-payer.