Jim Offner is The Courier's business editor. Contact him at This email address is being protected from spambots. You need JavaScript enabled to view it. .

The idea of a federal overhaul of the health insurance industry, which embraces one-sixth of the U.S. economy, always has been a little intimidating -- perhaps frightening, considering Americans fiscal and physical health are at stake.

But the Affordable Care Act, a.k.a. Obamacare, always seemed to be more a matter to worry about in the future. That was probably the only sliver of comfort it offered.

No longer. It’s here now, and we’re actually seeing pieces of this massive health care mosaic move, as experts have been predicting.

They said industry consolidation would squeeze out little insurance companies, and that appears to be the case.

Events in recent weeks have shown their words were prophetic: Aetna is merging with Humana. Anthem is buying Cigna. Big players are becoming bigger players. Smaller insurers are disappearing. This comes at a time when consumers are just starting to feel the full impact of Obamacare.

They’ll feel it even more, as this consolidation marches onward, said Eric Wilson, a Romeoville, Ill.-based insurance broker who sells family insurance packages in 10-12 states, including Iowa.

“I would say competition is a good thing, so when you have fewer companies, you have less competition, which is a bad thing for consumers,” Wilson said.

Iowa, of course, is dominated by two major players: United Healthcare and Wellmark Blue Cross and Blue Shield.

“United and Blue Cross will get bigger, which I guess is good for them, but when consumers have only two companies to choose from, that’s not a good thing,” Wilson said.

The idea behind “health care reform” was to bring costs down; the opposite is happening, Wilson said.

“Most companies are asking for 30 to 50 percent rate increases due to the claims ratio this year,” he said. “That’s going to be detrimental to the consumer.”

Smaller companies simply can’t compete, Wilson said.

He pointed to CoOportunity Health, one of 23 health insurance cooperatives set up with millions of dollars in federal grants and loans under provisions of the ACA. CoOportunity, which service more than 100,000 customers in Iowa and Nebraska, fell apart in January -- the first co-op to fall.

Others likely will follow, Wilson said.

“There are 19 other co-op plans designed under the health plan that are losing money,” he said.

Bigger insurance companies are vulnerable, too. Milwaukee-based Assurant Health, for example, closed in June.

Politics have blurred the distinction between health care reform and health insurance reform.

They’re not the same, Wilson said.

“The problem with the health care law in general is it never addressed health care costs,” Wilson said. “It addressed health care insurance, but they seem to forget health care. Insurance costs are a derivative of health care costs, and the law did nothing to curtain health care costs. When you pay more out in claims, you have to pay out more in premiums to stay profitable, and this law did nothing for that.”

A health policy for a family of four that cost $3,600 a year 10 years ago now will cost more than $10,000, Wilson noted. That premium doesn’t buy as much, either, with deductibles and other out-of-pocket expenses having zoomed upward.

Wilson said things are bound to get worse.

“I think we’re headed down a bad path; the cost is unsustainable,” he said. “They need to figure out this law doesn’t work. There are some good things, but they need to take the politics out and agree what is good and what is bad and fix it.”

source: http://wcfcourier.com