InsideSources

If you think your health insurance premium is too expensive, there’s bad news: insurance companies say the price may go up next year.

Health care premiums through individual exchanges under the Affordable Care Act (ACA) skyrocketed 2014-2018, and according to the Government Accountability Office (GAO), they will continue to rise through 2019, making health care more unaffordable for individuals not buying health insurance through an employer.

Conservatives criticized the ACA before President Barack Obama signed it into law in 2010, fearing it would raise health insurance costs for many Americans.

When the ACA went into effect, a provision allowed states to reimburse insurance companies if costs reached a certain threshold. This helped keep premiums from rising too high, and made health care more affordable for healthy and unhealthy Americans (premiums are the monthly amount an individual pays an insurer for health coverage).

But the reimbursement provision phased out in 2016, which contributed to the recent jump in premiums, two insurers told the GAO. Not only that, but as the GAO found in a report released this week, health insurance claims were higher than insurers expected from 2014-2016, prompting insurers to offload the costs onto customers via higher premiums. Medical and pharmaceutical costs were also higher than expected.

According to the GAO, “in some cases [the premiums were] between 6 and 10 percent higher in 2014. This was due to enrollees being sicker than expected, higher costs for some services, and certain federal policies, such as initial policies for special enrollment periods that issuers were concerned allowed for potential misuse.”

The GAO also found that the price tag on premiums varied widely year to year in different states and with different insurers, as did monthly claims costs.

Gerald Kominski, professor of health policy at the University of California Los Angeles (UCLA) and senior fellow at UCLA’s Center for Health Policy Research, told InsideSources that lawmakers assumed the health care industry would stabilize by the time the reimbursement provision phased out, and that insurance companies wouldn’t need reimbursements to keep premium costs down.

“Once the market was up and running over the next few years, the original ACA assumed it wouldn’t need this protection,” he said. “I think this report is saying this thinking was wrong.”

Kominski said the individual market is a “relatively small piece of the overall insurance market,” so it’s difficult to judge the merits of the ACA on this report alone.

At the same time, the report highlights a serious flaw in the ACA.

“It confirms what I think many of us who have been following the impacts of the ACA know from anecdotal evidence,” Kominski said. “This is more of a systematic look.”

But making adjustments to the ACA — or “repealing and replacing” it with a better law — probably won’t happen anytime soon given Democrats’ and Republicans’ inability to reach an agreement on health care.

“I think the biggest problem we have is we’re in a political gridlock because we have a Republican president, a Republican senate, and now a Democratic house, and the Democrats and Republicans are completely at odds with how to treat the Affordable Care Act,” Kominski said. “In a Democratic Congress and president, there might be mechanisms to increase federal funding to provide reimbursements to insurance companies to help keep their premiums more affordable, but that’s the exact opposite direction Republicans want to go in.”

Republicans abandoned a plan to “repeal and replace” the ACA last year, but instead of settling to adjust the ACA, many conservatives still want to “repeal and replace” it in order to fix systemic problems in the health care industry.

The Heritage Foundation released a report last year outlining ways to address the ACA’s flaws, focusing on the need for patients to control their health care options and allowing states to “adjust insurance rules” based on each state’s unique market conditions.

“What was needed before Obamacare, and is still needed in the wake of Obamacare’s damage, are reforms that re-orient the system toward being patient-centered by giving individuals and families the ability to control the flow of health care dollars and crucial health care decisions, and by forcing providers and insurers to compete for customers by offering better care at lower costs,” the foundation argues in the report.

In other words, if patients control their health care experience, then there won’t be an incentive for insurers to abuse them or raise costs. The foundation also proposed adjusting federal funding for each state based on its unique market needs, like how many residents are low-income or have certain medical conditions.

“While states would be free to use the block grant to design their own state programs, if an individual was unhappy with the coverage option or options offered by the state using its grant funding, she would have the ability to take the value of her state subsidy and apply it toward any private coverage for which she was otherwise eligible, such as a plan offered by an insurer, an employer, or an association, including health plans sponsored by professional or faith-based organizations, or health plans that included a direct primary care component,” the foundation states.

Until a better health care law succeeds in Congress, reinstating reimbursement provisions for insurers could be a useful quick fix. Some states are already considering their own reimbursement programs.

“The one difficult thing about health insurance market is, a small amount of people account for a very large percentage of spending — 10 percent of people count for 50 percent of spending,” Kominski said. “So what happens is, insurance companies going into the marketplace might enroll a handful of people who are really high cost, and that can make their premiums jump up and down from year to year. Given that volatility, there aren’t enormous numbers of people in some states participating in the marketplace. I think reinstitution of federal reimbursements would protect insurance companies from the risk of really expensive patients.”

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Republican Sen. Ben Sasse argued Friday that trade has significant national security benefits. But his remarks come as current trade agreements are under threat.

President Donald Trump has argued that the past approach to trade and immigration has allowed companies to undercut workers with cheap foreign labor. He pledged to withdraw from or renegotiate trade agreements so they better serve American workers. But many economists fear he could inadvertently hurt those very same workers.

The North American Free Trade Agreement (NAFTA) has become a major focus for the administration. The president has already begun the process of renegotiating the massive trade deal with partners like Canada and Mexico. He has threatened to pull out during negotiations which sparked concern from the business community.

“If you look at the effects of trade just from an economic standpoint, we’re obviously going to get to national security implications as well today, but if you look at trade just as an economic matter, it’s been indisputably good for the U.S. throughout history,” Sasse said. “This isn’t an economic theory, it’s historical reality, and NAFTA, in particular, has been indisputably good for the U.S.”

The Heritage Foundation hosted the senator along with a panel of experts to discuss the national security implications of a NAFTA pullout. The conservative think tank also released a report arguing that the trade deal has helped to promote free markets and economic freedom by strengthening institutions that promote the rule of law.

Sasse argued that the bigger issue impacting workers is that technology has been changing at a rapid pace. But the senator also added that national security should also be considered alongside the economic concerns. He argued that trade helps countries avoid disputes that could lead to war.

“When you have a lot of economic relationships between two countries or between a block of countries, when you have a lot of commerce between people, you end up building others kinds of relationships, as well, which often have huge global security implications,” Sasse said. “This isn’t really all that profound. It turns out you’re less likely to go to war with people that you know, like, and have shared interests with.”

The United States building strong relationships with trading partners could also be helpful in putting increased pressure on countries that are actually known for cheating, like China – a country the president has singled out himself. Sasse argues we shouldn’t hurt good trading partners while going after the bad ones.

President Trump has instead looked to policies that restrict trade more generally. He announced that new steel and aluminum tariffs would be imposed March 8. He has also put tariffs and quotas on products like dishwashers and solar panels. The goal being to punish countries that cheat – while prioritizing domestic workers and production.

Sasse and many economists have argued that workers and consumers will actually be left worse off. The increased costs from tariffs could go down the supply line which means higher prices for consumers – or a limited supply of products. That disruption in economic activity could lead to decreased job opportunities.

Sasse argued that lawmakers haven’t been having an honest and clear conversation about what is actually happening to jobs. He believes that the bigger problem is the technological revolution the country is going through. While technology has had a huge benefit on the economy, there are many workers who have been hurt. They have skills that are being replaced with advanced robots and computers.

The Bureau of Labor Statistics (BLS) recently reported that job openings currently stand at 5.8 million. The number of unemployed persons per job opening has steadily declined over the last decade, but there are still millions of working-age adults without work. A mismatch in needed skills is likely to blame in part.

President Trump has looked to address the problem by expanding job training programs like apprenticeships. The Government Accountability Office (GAO) found in a 2011 report that the federal government spends about $18 billion annually on job training programs.

NAFTA became a critical component in the national economy when it was implemented in 1994. The agreement reduced or eliminated tariffs and other trade restrictions to open up more access among the partner countries the United States, Canada, and Mexico. It was able to increase trade dramatically in the region.

NAFTA has also been a major point of contention since it was first implemented over two decades ago. Critics have argued the trade deal has benefited large corporations or foreign workers at the expense of domestic workers. But to supporters, the trade deal has been vastly more beneficial than not.

The American Action Forum, a center-right nonprofit, released a report Dec. 11 claiming that withdrawing from the trade deal could jeopardize 14 million jobs. The report also found that withdrawing could expose businesses to $15.5 billion in new tariffs and increase consumer costs by at least $7 billion.

U.S. Trade Ambassador Robert Lighthizer detailed during a congressional hearing June 22 that the administration plans to renegotiate trade deals to be fairer and more efficient, enforce trade deals more aggressively, and increase domestic exports. Trump has summarized his plan as, America first, but not alone.

Trump was also able to upend another major trade deal before it was fully implemented by withdrawing from the Trans-Pacific Partnership (TPP). The agreement would have been the largest regional trade deal in history at roughly 39 percent of global GDP.

The seventh round of negotiations ended earlier this month in Mexico City, Mexico.

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A mere six percent of unionized workers across the country voted on the union that now represents them, according to a panel discussion Thursday.

Labor unions are often praised as a democratic structure that provides workers a choice. In reality most unionized workers never had a choice to begin with. Unions that win the right to represent a workplace never have to face reelection unless workers explicitly file for a decertification vote.

“Unions have an incredible amount of control,” Heritage Foundation Research Fellow James Sherk said during the panel. “I thought it would be an interesting question to ask, what fraction of unionized workers actually voted for the union that represents them.”

Roughly eight million workers throughout the country are represented by a union. The analysis finds that only about 478,189 of those workers actually voted in their union. Its not uncommon for a union to represent a business for several generations. They sometimes outlive the very workers that voted them in.

The panel included a unionized automobile worker along with a former member of the National Labor Relations Board (NLRB). Heritage hosted the panel discussion to correspond with new research which demonstrates the small percentage of workers that had a chance to vote.

“There is no requirement, as James pointed out, that a representative union stand for reelection ever,” former NLRB Member Brian Hayes stated. “They can exist in perpetuity and there is no external force which says, okay, we have to recheck the representative status of this union. That just doesn’t happen, it doesn’t exist under the rubric of the National Labor Relations Act.”

The panelists warn that the current structure is prone for abuse. They argue that unions are not incentivized to provide a good service to their members because they don’t have to fear being voted out every few years during an election.

Sherk recommends that union election function more like a political election. Unions would essentially have to be reelected every few years or so. Wisconsin Gov. Scott Walker included a union reelection provision in his highly controversial Act 10 law. Critics argue the idea is merely a union-busting scheme.

“Act 10 requires that the union win 51 percent of all those eligible to vote in a bargaining unit, and the final tally of 49.5 percent fell short,” former Wisconsin State AFL-CIO Research Director Joanne Ricca said in 2013. “Any employee who does not vote is essentially counted as a ‘no’ vote.”

Hayes also notes that its much more difficult to get rid of unions. Decertification votes come with many conditions imposed by both the government and the union representative. The process tends to take longer and unions can disrupt it through a variety of avenues like filing an unfair labor practice complaint.

Economist Stephen Moore detailed a dismal look at where the global economy stands during a panel discussion Wednesday.

Moore has written on economics for roughly three decades including as the chief economist at The Heritage Foundation. He warned during the panel discussion that ongoing slow economic growth is causing serious problems domestically and globally. Moore argued that things can turnaround through increased economic freedom.

“This has been the slowest recovery we’ve had from a recession since the Great Depression,” Moore stated. “In my opinion the business sector right now is in what I call a soft recession. These are dangerous times and the economy is way under performing.”

Heritage hosted the panel discussion to correspond with its new report on global economics. The report also advocates that policymakers start moving toward increased economic freedom.

Moore notes the economy grew by only one percent over the past six months. Additionally, businesses have been hesitant to grow and invest with current conditions. He asserts that taking a more free-market approach resulted in great prosperity from 1980 to 2005. But he believes those ideas are losing favor with many people.

“We saw half of American voters in the Democratic Party vote for a socialist,” Moore also noted. “That tells you a lot about the fact some of the ideas we’re talking about have lost favor. And its a distressing thing to see because as these ideas lose favor people will become poorer.”

President Barack Obama was elected into office during of a severe economic downturn now known as the Great Recession. Some economists have predicted the United States will continue its slow recovery for the next 25 years. Moore counters that its not too late for countries to bounce back through policy reform.

“In my opinion it wouldn’t be too hard to get the United States and these other countries to start growing again at a very rapid pace,” Moore noted. “We could grow at four percent for five years. Four percent for five years. That’s like adding another Texas onto the U.S. economy.”

The recession was sparked by the subprime mortgage crisis and the financial crisis of 2007. The president blamed the slow recovery on Republicans March 4 while praising the few successes on his agenda. Moore is confident that if the United States starts changing its policies, the rest of the world will follow.

“I do think if the United States starts getting these things right, they will spread like a virus around the world,” Moore said. “You’ll have another 25 year period of unbelievable prosperity.”

The president has often touted his economic recovery as a success because unemployment is around pre-recession levels. His analysis, however, overlooks that the labor force participation rate has been in a sharp decline since 2008.

Those in support of the $15 minimum wage have fought to enact the policy nationally but often overlook its varying impact on each state, according to a report Wednesday.

Supporters of the increase have argued the policy could help address poverty. Critics, however, warn it could limit job opportunities because it increases the cost of labor. In a new report, The Heritage Foundation warns the policy will have a vastly different impact in each state because they have different costs of living.

“Many businesses might respond to a $15 mandate by eliminating positions, cutting hours, and looking for new ways to implement labor-saving technology,” the report detailed. “States with lower living costs would experience relatively greater job losses.”

People in states with a lower cost of living usually pay less for products and services. Their wages tend to be lower, too, as a result. States with a high cost of living tend to have higher wages already, meaning the impact of a national $15 minimum wage will be less severe in those areas.

“For example, New Jersey and Georgia have similar total employment,” the reported went onto say. “However, Georgia would lose almost twice as many jobs to a $15 mandate.”

Lawmakers most often design the policy to phase in over a few years to help mitigate its economic impact. The report took that into account and calculated potential job loss if the policy was phased in nationally by 2021. New York and Washington D.C. showed no impact because they will have already implemented a $15 minimum wage by that year.

“These estimates provide important information about the impact of large minimum-wage increases on job opportunities and poverty,” the report concluded. “Efforts to create jobs and reduce poverty should not center on forcing employers to pay higher starting wages.”

California was the one other state that has already passed the increase. The report showed the state will lose 193,000 jobs because it would have only reached $14 an hour by 2021. Arkansas would have the biggest impact at 46.5 percent of workers directly impacted by the policy resulting in 101,000 jobs lost.

The Heritage Foundation is a think-tank that typically studies issues from a conservative economic perspective. Researchers at left-leaning institutions have found an increased minimum wage will yield mostly positive results. The University of California, Berkeley found any losses would be marginal compared to the potential benefits.

The Fight for $15 campaign has been at the forefront of the policy push. It has utilized rallies and media campaigns to advocate for the policy since it started in 2012. The movement is primarily funded by labor groups like the Service Employees International Union.

Vermont Sen. Bernie Sanders has been a leading voice backing the issue. He made the policy a cornerstone of his presidential run and even introduced legislation in July 2015 that would have enacted the increase nationally.