A new iteration of the Senate health care bill designed to replace the Affordable Care Act is expected Thursday.
It's Senate Majority Leader Mitch McConnell's attempt to address concerns by Republican members on the right and in the center. It's still not clear if McConnell can round up the votes he needs.
The GOP and the White House both say they must act now because the private insurance markets set up by Obamacare are collapsing — but are they really?
Data released by the Trump administration shows that — in fact — those markets are pretty stable.
For more, Take Two spoke to KPCC health care reporter Michelle Faust.
Michelle, please figure it out for us. What's this new information from the Trump administration?
I'm going to get to that in just a moment, but first we have to do a little bit of a health insurance 101.
The individual health insurance market covers about 9 percent of people insured in California. About 45 percent of Californians receive health coverage from their employers. Covered California is California's marketplace for private insurance.
The key to success in markets like Covered California is stability, which comes down to managing risk for insurance companies. Health insurance prices are based on future predictions of what it will cost an insurer to pay for health care.
The Affordable Care Act prevents insurers from charging customers with pre-existing conditions more for insurance. Because of this, it's harder for insurers in the Covered California marketplace to set prices.
To tackle this challenge, the federal government created two programs to help companies determine risk. In an ideal world, these programs can prevent insurance premiums from spiking.
Those programs are:
Reinsurance: Insurance for insurance companies. Under this program, insurance companies would get money back if covering people cost more than expected. This program shelled out about 573 million dollars last year. It also ended in 2016.
Risk adjustment: The government has less-expensive customers pay into the pot. Companies that have more high-cost customers get money back. This program is still active.
Data released recently by the Trump administration reveals that those two programs are performing relatively well, especially in California, where patients were 20 percent less costly to insure than in other health exchanges. Covered California says this is because more people were able to sign up through the marketplace.
Michelle, I'm still scratching my head a little bit because I'm wondering what the disconnect is here. The White House insists that the Obamacare exchanges are collapsing. What gives?
That depends on what part of the picture you're looking at. The Kaiser Family Foundation found that — in the first quarter of this year — plans were the most profitable that they've been since the beginning of the ACA. In terms of healthcare providers, it's getting better.
In some parts of the country — mostly rural areas where there is less competition — insurers are pulling out. When that happens, it makes headlines when they've got no insurers or only one insurer. As we've established, insurance is all about risk, and companies are likely to charge more when they can't predict what's about to happen.
With drastic changes on the horizon for Obamacare, many insurance companies are preparing to raise their rates.
Press the blue play button above to hear the full interview.
(Answers have been edited for clarity and brevity.)