3. The big business of government health care
Health insurance companies used to collect a majority of their premium dollars from people who had coverage through their jobs. But their growing stake in running government health care programs has accounted for a larger share of premiums over the past decade, Bob reports.
The big picture: Don't expect this to slow down. More low-income people have gained private Medicaid coverage through the ACA, more states are privatizing their Medicaid programs, and more seniors are switching to privately run Medicare Advantage plans.
By the numbers, per data from credit ratings agency A.M. Best:
- Managed Medicaid, in which states outsource their programs to health insurers, represented only 10% of insurer premiums in 2007. That ballooned to 27% as of last year.
- Medicare Advantage rose from 17% of premiums in 2007 to almost 25% in 2017. Republicans and Democrats support the program, but it has been tied to waste and over-billing.
- Commercial premiums have declined from 58% in 2007 to 38% last year.
- The commercial portion includes the ACA's individual exchanges, where taxpayers cover the vast majority of enrollees' premiums.
The bottom line: Taxpayers are directly funding more of the operations of the health insurance industry.
Yes, but: A.M. Best says a larger share of government health care programs poses financial and political risks for insurers due to "a greater reliance on state and federal funding, as well as a growing dependence on federal rules and regulations."
Go deeper: The Des Moines Register has a devastating story about a widow who attributes her husband's death, at least in part, to Iowa's embrace of Medicaid managed care.