ELISSA NADWORNY, HOST:
A lot of things are squeezing your wallet right now, including health insurance. Higher premiums and fewer people signing up has made the Affordable Care Act insurance marketplace even more expensive, messy and frustrating. Bruce Japsen is Forbes' senior healthcare contributor, and he joins us now. Thanks for being here.
BRUCE JAPSEN: Thanks for having me.
NADWORNY: OK. So I want to start with how we got here. Basically, it wasn't only just one year ago that we were talking about these historic numbers of people enrolling in insurance on the marketplace.
JAPSEN: We saw a big jump. So when the exchange started over an - a decade ago, I think it was something like 8 million people signed up for Obamacare, and this is individual coverage under the Affordable Care Act. These are people that probably didn't have insurance before or left their jobs. They had an option. And of course, you know, if you had preexisting conditions, you couldn't get an insurance, or it'd be outrageously expensive.
And by and large, if you go to the website, depending on your income, you could get a subsidy to buy coverage. Well, the Biden administration and the Democratic-controlled Congress - they enhanced the subsidies so more people can get the credit. And the popularity of Obamacare hit an all-time high of 24 million last year. Earlier this year, the Republican Congress and the Trump administration did not renew the enhanced subsidies, and so now people are dropping the coverage. And we know that because the health insurance companies are starting to report their first quarter earnings, and we're seeing that enrollment in Obamacare is down by several million people.
NADWORNY: And they're not getting insurance, then, through an employer.
JAPSEN: Correct. And so there was a big market, and a lot of the insurance companies said, Congress is going to create these enhanced subsidies. We'll move into more parts of the country and sell more. And then there was competition. Well, now, when the - with enhanced subsidies going away, the Trump administration said in January that enrollment was down by a million. Well, signing up and then paying your first claim are two different stories. And so now what we're seeing is that people are getting this sticker shock - major out-of-pocket premium increases, which is what KFF, formerly known as the Kaiser Family Foundation, and other groups have said would happen - that people would say, I'm not buying this, I can't afford it.
NADWORNY: Now, can you briefly tell me what insurance companies have dropped from the marketplace?
JAPSEN: Yeah. CVS, which owns Aetna - Aetna decided about a year ago that they were getting out, and they had provided Obamacare to a million people. Other companies - a company called Oscar Health - they picked up a lot of their members. Oscar Health tends to operate in more metropolitan markets, and so they got the Aetna members. But now Cigna is saying that they're getting out. And so that will mean that 369,000 people who now have to pick another plan - it's certainly a big deal to them. And we won't know until probably late summer or early fall whether some of these other companies will get out of the Obamacare business or they will decide to not be in a certain market.
NADWORNY: Be in this rural area or be in this state.
JAPSEN: Yeah. Rural areas, in particular, which - important places to the Republican voter - those places tend to be - it's more difficult to get health insurance companies to sell products to begin with. Centene, which sells Ambetter, for one - they're down 2 million members.
NADWORNY: What does this mean for the insurance market as a whole? I mean, even for folks who don't get their insurance on the marketplace.
JAPSEN: Yeah. That's a great question. Health insurance costs are already going up. By and large, a lot of the statistics will say, like, 9%, 10%. Like, we're talking double digits. And part of that is related to, in the pandemic, people were avoiding care. Even though we've been out of that for two or three years now, it's had a hangover where we're seeing the insurance companies are already - they're seeing this influx of patients, and so their costs are high.
And so to make money and provide the care and turn a profit and all that fun stuff, they have to raise premiums, so the premiums are already going up. And when you have the legislation that Congress passed, that's going to make it - I don't care what anybody says. It's going to make it more difficult for people to sign up for Medicaid because they're introducing work requirements. Some people are going to say, I'm not messing with this. I'm just not going to get coverage.
NADWORNY: How is this going to affect already-squeezed consumers?
JAPSEN: It's hitting them hard. I mean, I was just talking to a young guy the other day. He's mid-40s, lost his job, was eligible for enhanced tax credit last year. And he said his premium went from $400 or $500 a month to $1,500 a month. And even people who have coverage through their employers, employer plans and premiums out of their pocketbook are going up. So if you're wiping out your raise and inflation is going up and gas prices are going up and now you have your health premiums going up, that is not good for lots of people. And it's not a small number of people. It's probably millions of people.
NADWORNY: That's Forbes' senior healthcare contributor Bruce Japsen. Bruce, always, thank you for being here.
JAPSEN: Thanks for having me. Transcript provided by NPR, Copyright NPR.
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