This is Scott Becker with the Becker Healthcare podcast. Today is is one of my favorite parts of the week. I get to speak to Jacob Emerson. Jacob covers at Becker Healthcare the payer universe, the payer landscape. And and one of the things I love about talking to our different lead journalist and brilliant people like Jacob Emerson is I'm hoping that I learn what our audience learns what's going on in the payer world, and that's the world he covers. Jacob, I'm gonna tee it up. I'll ask
you to take it away. What are the couple of things that you're watching closely in the payer world currently? Sure. It's it's good to talk with you, Scott. It's it's been too long since we last chatted, but I, I thought today we could talk about everything that's been going on over these last few weeks to a month with the ACA enhanced subsidies. You know, of course, it's it's been in the the spotlight politically because it's what the shutdown,
hinged on. And there, of course, has been no solution legislatively to to what's gonna happen to these subsidies, and ultimately to people's premiums as we head into next year.
But our team has really been, over these last few weeks, really, touching base with leaders all over the country, both at health plans and at health systems, you know, just to figure out how are you preparing for all of this going into the next year in terms of, you're gonna see they're gonna see a lot of membership losses within their individual businesses on the health plan side.
So that makes things worse for the people who do stay in the exchanges, and then how the health systems are preparing for all of this in terms of what this means for their payer mixes, arise in uncompensated care as people just, don't purchase the type of insurance anymore. So just a lot of different swirling, factors going on here. I thought we could dive into really what we're seeing today as as, at the November.
Certainly. And one of the things I found fascinating is president Trump seemed to sort of wanna find a way to meet this in the middle Yeah. And continue some of the subsidies for a couple years. And and, of course, this was met maybe with applause on the left and absolute hatred on the right, where where it seems like almost people on the right are are so excited to get rid of these subsidies for right or for wrong. There's all kinds of thoughts on whether this is these are
good or bad. I think all of us, at least in health care, believe we should have coverage for all. Were the subsidies or the ACA the right way to get there? I don't know. But But I think generally, us in health care think we need coverage for all, but we also need access and supply for all. But but talk to us about this fight on the right where president Trump got in the front then saying, okay. Let's continue this for a bit. And then he got flanked by the right wing who
said, no. No. No. No. We're so thrilled to have these out of here. Talk about
what's going on there. Yeah. I mean, I think just from that that last piece, the Republicans are in a pretty difficult position right now because, you know, when you look at who's enrolled or or where a lot of the enrollment growth in the ACA has come from over these last few years, it's in, red states where you where in the past, you saw really high uninsured rates, still do, of course, but, places like Florida, Texas, and a lot of the South, they led ACA enrollment growth over these last
few years. And so this directly hurts, constituents on the ground for for Republicans, especially those in the house. And they know this is this is not a weighing issue as we head into midterms next year. So there's that side of it, but then, of course, there's there's side of it that it's that it is Obamacare. And, I think just if, you know, we look at the grand scale of the grand history of all of this, they are against that, and they don't want to continue this this policy or this system,
as it currently stands. So, the Republicans are definitely split right now. I think that's why we're seeing so much waffling from from the president, from and the White House. And and then, of course, that's why we're seeing some house Republicans have introduced legislation to extend the subsidies, especially those that are in really close elections next year.
But then there's the there's the really traditional hard line conservatives that do not want any kind of extension, made to to the Affordable Care Act, moving forward. They wanna let it essentially die on the vine. So I think that's where, you know, the
Republicans are struggling here. And that's really over these last few days, like I said, where we've seen the president go is we we heard there were reports, very credible reports, that the White House wanted to roll out this this new policy to extend the subsidies the enhanced subsidies for two years, introduce some some premiums into into the ACA, so that, to avoid some of the the fraud issues that Republicans, have really been flagging these last few years,
by requiring people to pay a small minimum payment, and then and then tying in health savings accounts. HSAs, basically, people who switch to lower premium marketplace plans could, direct the difference in premium costs into, those tax advantage savings accounts,
funded with their subsidy dollars. And and that's just been really interesting to hear the president, I think, tweet about, say out loud these these last few weeks is, describing the the insurance companies, which, of course, really benefit from from the ACA, in that business. They're calling them money sucking insurers, and saying that instead of this money going to the insurance companies in the form of subsidies, this money should be flowing to consumers, I guess, in the form of of, HSA
deposits and and things like that. So, it's interesting where where the president is going and taking more of a populist approach where neither party is really a fan of of the insurance companies right now, but then also just the the the rock and a hard place that the Republican party is in, when it comes to these subsidies because at the end of the day, premiums are gonna skyrocket without these. And, you know, it's gonna have public because
I can see that. No. No. No. And here's a couple of fascinating takes on this, and I'm trying to piece this all together because regardless of the subsidies, for those that are not buying the health care through the ACA or through these exchanges, rates are surging no matter what. Those seem to be going through the roof almost no matter what. So you've got that issue. So now we're talking about that category of people that are getting subsidies, and this is an incredibly complicated spot. You
say rock and hard place. I think that's exactly right. The people that are getting subsidies need those subsidies. At the same time, the many, many people on the left and right think the insurance companies just sort of get richer and richer through the subsidies, that it really ends up being a benefit that goes through the insurance companies. But but I guess in some ways, from a Washingtonian perspective, it's too complicated to parse through all this.
And then president Trump was trying to hit this down the middle some way or shape or form by saying we're gonna increase the amount of income you have to have to have eligibility for this or or decrease it. So that sort of made it harder to be eligible for the subsidies. Now it's just sort of seemingly his trying to swash the right wing of his party. But but it does seem like we're in a rock and a hard place because you please the individuals get the subsidies, but you
also please the insurance company. I saw I saw yesterday, for example, Oscar Health went up 20% on the news that there might be some kind of deal around this, which is, you know, it's in Alaska, it might be a smaller insurance company, but nobody loves to see the insurance companies getting rich. How do you sort of parse through some of these issues? Yeah. I mean, I think and what you're pointing to and what I've heard a lot of people in the industry talking about too, Scott, is that
the the to to your point, yes. It's either you get this subsidies or you don't. You get the enhanced subsidies or you don't depending on your your income level, or your family's collective income level. But the the the greater problem here is that, that the the insurance the products being offered on these marketplaces are just too expensive for most people to afford, without the federal government's, literally throwing money,
to to subsidize them. And I think so so that's the overarching problem that just isn't going away here. Even if these things are extended for two years, that these health insurance plans are too expensive, that that people cannot afford them as they
exist on their own. And that doesn't really seem to be a problem that, that that the congress is capable of, of attacking right now without, the the only solution apparently being, you know, this this, Band Aid solution of of having the enhanced subsidies. So it seems as if it's just a problem that is not going to go away regardless of whether what happens by the end
of this year or not. But what I also think is interesting, in terms of what we're seeing, how how we're seeing the insurers respond and actually tell us directly, the largest one, UnitedHealthcare, they're not the largest ACA insurer, but they are, the largest health insurer in the country, because of the employer coverage. But they're they're, raising rates 25% on their ACA plans across the 30 states. They they offer them next year, and expect their enrollment in that business to decrease by
about two thirds. So one one of the largest ACA carriers is literally expecting two thirds of their enrollment to disappear, without these subsidies in place. And that means that the pool that then stays, it just it's it's gonna be the risk pool changes. People either, it's it's a worse risk pool. It makes it more expensive for the people who are still there. It's just a downward spiral, as these as these subsidies go away if
they go away. So it's so that's another, I think, rock in the hard place that the the entire country is in is these subsidies are really are a Band Aid solution to the fact that this is just an unaffordable product to start with. But if they don't exist, then you get this downward spiral where the the insurance becomes even worse, as as it stands now. So,
yeah, it's a it's a tough one. And I think that's, again, that's why we're really not seeing any hard solutions emerge, because, the you know, there's gonna be some, hard But but I think your point your point is so well taken that the subsidy is whoever you handle this is a band aid, and and I'll be in an important band aid for a lot of people, but it doesn't solve the ultimate cost or supply demand issues that we have in health care. So so it's sort of you could do these subsidies forever.
We keep on driving up the cost of health care without making it affordable and quite frankly, without improving access. And and, ultimately, the harder problem of congress solving supply and demand here or or new ways of dealing with health care seems to be a really, really big and real challenge. Yeah. But not one that's easy to solve or that people really wanna put their heads together and try and problem
solve around. Yeah. Well, and and one thing I I think too is interesting about all of this, Scott, is that another macro context of of all of this is that, you know, that we we have a completely different economy in terms in workforce nowadays, in terms of people are retiring earlier, so many more people are are self employed or freelance,
compared to decades past. And so, you to into your earlier point, we need, a a coverage option available for people to purchase at an affordable price because that is how our our modern workforce operates. But at the same time, like I said,
you know, this isn't this isn't affordable. And so, you know, what's what's what's happened in the past under the Trump first Trump administration, we saw ICRA come out under the ACA where instead of that traditional group policy, employers could offer that that tax free advantage so that instead of going to the insurer, purchasing a plan for everybody, they then give they they basically reimburse the premiums money for each each employee to go to the ACA
in their state and purchase individual health coverage. And and, again, that was set up by the Trump administration in 2019. And so they're almost sabotaging that in a way, their own alternative to the traditional employer sponsored insurance model, because the the this risk pool on the ACA is probably gonna get worse. These premiums are gonna get more expensive. So there's an alternative out there, ICRA, and and, again, set up under the Trump administration the first time.
And it's and that's that alternative is is gonna become, less appetizing if these don't continue to exist. So I think that's another piece of all of this as well is that, you know, we do need that option for people in in this modern workforce, and and the Trump or the first Trump administration, provided that. And then now it's, you know, it that's also kind of, seen some some issues potentially in the future too, all tying back to the this subsidy conversation.
I I think your point there, Jacob, it it is really such an important point that if traditionally so many people's insurance was tied to their employers and we're moving so much more to a world where people aren't full time w two with a specific company and not not quite as engaged in getting that type of health care insurance coverage. These other alternatives of buying insurance directly are so important and so expensive and so challenging. Jacob, I know we've got a wrap up
today. I could talk to you for hours quite frankly, but but this is really interesting and really helpful. I'll work with Chanel to get this episode out very quickly. Again, Jacob Emerson with the Becker's Healthcare. Just brilliant, covers the payer world. Thank you for joining us today, on the Becker's Healthcare podcast. Thank you, Scott.