President Donald Trump’s relentless pursuit to scrap Obamacare may be unleashing higher health care costs on the American people, says one leading voice in the space.
“Without a doubt,” EmblemHealth CEO Karen Ignagni said on Yahoo Finance’s The First Trade when asked about the impact of the current administration’s war on Obamacare.
Under Trump, the penalty for not having health care coverage was eradicated. Enrollment assistance has been slashed. Lower premium plans were introduced featuring less coverage options. The thinking behind these initiatives were likely to try to lower soaring health care costs, not raise them further.
Ignagni believes that has not been the case. Instead, it has driven up uncertainty among insurers on the outlook for the Obamacare exchanges and the health care system at a time of rising drug and health procedure costs. In turn, health insurers such as EmblemHealth have been keen on raising prices to compensate for those costs and the general uncertainty.
“We had a path the country was on with respect to getting everyone in [to health care] and that was a significant step forward,” explained Ignagni. “Now as policy makers have chipped away at the strategy it has caused some people to leave the system and that has caused prices to go up.”
It should be noted that Ignagni was a vocal supporter of Obamacare while serving as CEO of America’s Health Insurance Plans. Ignagni, viewed by many as one of the most powerful executives in health care given her knowledge of D.C., took the role as EmblemHealth CEO in 2015. The health insurer counts more than 3 million members for its mostly New York-focused plans.
EmblemHealth offers up a good example on how health care system dysfunction caused by both political parties could mean higher expenses for the insured. The company recently proposed a 13.5% premium increase for 2020 to the New York state Department of Financial Services, according to Crain’s New York Business. UnitedHealth topped the Crain’s list with a proposed 27.1% increase.
Overall, New York health insurers selling Obamacare plans reportedly requested a weighted average increase of 8.4% for 2020.
“What we see are very high health care costs — it reflects the cost of our population,” said Ignagni, referring to the increases.
Brian Sozzi is an editor-at-large and co-host of ‘The First Trade’ at Yahoo Finance. Follow Brian Sozzi him on Twitter @BrianSozzi
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