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Another Voice: On third anniversary, ACA’s future remains cloudy

By Stephen T. Parente

Friday marks the third anniversary of the Affordable Care Act’s implementation in New York. So it makes sense for New Yorkers to ask: How is the law playing out in your state?

Not well. Roughly 409,000 people purchased health insurance this year on the state’s Affordable Care Act online exchange, and those purchasing plans for 2016 likely found an unpleasant surprise. Monthly premiums for their plans will be 5.96 percent higher, on average, than they were in 2015. More than 200,000 had to scramble for new providers, after New York’s ACA-sponsored insurance co-op had no choice but to leave the exchange altogether. Deductibles and out-of-pocket costs are also on the rise, and health care provider networks are narrowing. The combination of these factors helps explain why the federal government recently halved the number of people it expects to sign up for the law’s health insurance.

Yet while the outlook for the Affordable Care Act is already bleak, the data show it will likely become even worse.

That’s the result of an analysis I conducted in recent weeks. Using the latest health insurance exchange enrollment data and a model funded in part by the U.S. Department of Health and Human Services, I estimated how the Affordable Care Act will affect the health insurance market over the next decade.

In brief: Costs will continue to rise and coverage will continue to underwhelm. In fact, coverage will likely begin declining in the next few years, leaving millions more Americans uninsured than today.

The outlook in New York will start to become scary in years ahead. I project premium increases for 2017 health insurance will average at 7.4 percent for individual plans. Family policy holders will likely pay 6.2 percent more. That trend will hold for years to come.

Rising costs and decreasing coverage will undermine the Affordable Care Act’s central goal of universal coverage. I estimate the total number of uninsured in 2025 will be roughly 40 million – roughly as many uninsured Americans as there were before the law was passed.

Such is the Affordable Care Act’s likely future as it nears its anniversary. This puts in context the claims of Hillary Clinton, who earlier this month said the Affordable Care Act is “working.”

That may make for a good sound bite on the campaign trail, but it doesn’t match with the experiences of many of the New Yorkers who are dealing with the law firsthand. They’re paying more and getting less with every passing year – a trend that shows no signs of changing any time soon.

Stephen T. Parente, Ph.D., is a professor of health finance, associate dean of the Carlson School of Management and director of the Medical Industry Leadership Institute at the University of Minnesota.