Obamacare is Only 'Exploding' in Red States

July 18, 2017
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Obamacare is Only 'Exploding' in Red States

Dean Baker
The Los Angeles Times, July 13, 2017

See article on original site

When he talks about his efforts to repeal the Affordable Care Act, President Trump almost always asserts that Obamacare is “exploding.” Republican members of Congress make similar claims, insisting that Obamacare is unsustainable—and that they therefore have no choice but to “repeal and replace” it.

There is some basis for this argument. More than 1,300 counties only have one insurer in their exchanges, meaning there is no competition. But there is a nuance that Republicans willfully ignore: This is a problem of their own creation that is largely confined to red states.

Where Republican governors have sought to sabotage the program, they have largely succeeded. Where Democratic governors have tried to make the ACA work, they too have largely succeeded.

Here are the basic numbers. In states with Republican governors, more than 40 million people live in counties with only one insurer. In states with Democratic governors, there are 10.7 million people who live in such counties.

The difference is far more dramatic if we exclude North Carolina from the Democratic list. While North Carolina does now have a Democratic governor, it had a Republican governor until January, and even now the Legislature is overwhelmingly Republican.

Not counting North Carolina, only 2.1 million people in Democratic states live in counties without competition. Put another way, if someone lives in a state with a Democratic governor other than North Carolina, they have a 1.8% probability of only having a single insurer in their exchange. If they live in a state with a Republican governor, there is a 20.7% probability of the same.

There are two main ways in which Republican governors have been effective in sabotaging Obamacare in their states. The first and most important was by refusing to expand Medicaid.

Governors who chose to expand that program pulled many lower-income people out of the Obamacare insurance pool — people who tend to be less healthy and have higher medical bills on average. By taking this higher-cost population out of the exchanges, they reduced the risk to insurers. Applying this logic inversely, governors who refused to expand Medicaid ended up with a less-healthy mix of people in the exchanges.

The other issue is the extent to which states took the initiative to promote Obamacare. Less healthy people generally don’t have to be prodded to buy insurance, since they know they need it. The issue is whether more healthy people buy into the system. Insurers are going to lose money if all the people they insure have serious health problems.

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