The federal Affordable Care Act, also known as Obamacare, was front-loaded with its most appealing attributes.

Some people who had no health care now are covered. Those with pre-existing conditions can’t be denied coverage. Young adults can stay on their parents’ plans until age 26.

The pain and ways-to-pay, however, were backloaded.

The idea was to dish up the goodies and then, once we were hooked, send the bills.

Since 2010, when it became law, we’ve warned about how much Obamacare would cost, how it would be paid for, about the opacity and misdirection (remember Jonathan Gruber?) surrounding its creation.

Minnesotans recently got a glimpse of certain consequences: Rates for those who buy their health insurance on the individual market will rise sharply— up to 49 percent higher, year over year. (Last year, the Dayton administration took well-deserved flak when it touted a low — but unweighted, and thus distorted — average increase of just 4.5 percent. By that same unweighted reckoning, this year’s increase would average 31 percent, according to state Commerce Department figures.)

Yes, these particular increases affect fewer than 6 percent of Minnesotans because most are covered by employer-based insurance, where rates aren’t rising so fast, or publicly subsidized programs. That rates in Minnesota may remain among the nation’s lowest is of note but small comfort to the 300,000 Minnesotans affected by this year’s leaps.

The Commerce Department, which approved the new rates, originally had received requests from insurers for increases up to 74 percent.

It cited factors contributing to added costs in the individual market, including:

— A higher-than-expected percentage of less healthy, more costly enrollees.

— Higher-than-expected claims for medical care and prescription drugs, especially high-cost specialty drugs.

— Minnesota’s relatively small individual market, resulting in a smaller risk pool, which now includes more high-risk clients, across which insurers can spread their costs.

—Prices charged are set to cover the anticipated expenses,” explains Jim Schowalter, president and CEO of the Minnesota Council of Health Plans.

“Premiums are expensive because medical care is expensive,” he said. “We all have to take a look at how we can make health care more affordable.” He suggests “a community approach to improving and slowing — if not reversing — health care costs.”

That will be harder in an environment in which the first instinct is to issue an angry public statement. An “extremely unhappy” Gov. Mark Dayton blamed the insurance companies. If they “make good coverage unaffordable for Americans, I believe citizens will soon demand that insurers’ excessive administrative overheads be eliminated, and that they be removed as the providers of health insurance.”

So much, apparently, for the market-based competition Democrats emphasized when they created MNsure — the state’s health care exchange under federal reform — and passed it without a single Republican vote.

In his statement, Republican House Speaker Kurt Daudt said Minnesotans “frankly can’t afford this failed system the Democrats have put in place,” calling on them to “stop standing in the way of the reforms that will frankly help us provide better, lower-cost health coverage for Minnesotans.”

We bring that political baggage to what Larry Jacobs of the Humphrey School of Public Affairs at the University of Minnesota describes as “a new day” for system reform.

“Now, we’re in the nitty-gritty debate about choices,” he told us. It will involve “tough choices about the kinds of benefits being offered.”

Jacobs expresses hope that the state’s task force on health care financing — due to report early next year — “is going to put some real options on the table.”

“There are going to be trade-offs,” he said. “You can’t have everything.”

Commerce Commissioner Mike Rothman, a task force member, is calling for changes to help stabilize rates. Noting that the department is limited in what it can do to restrain increases, he suggests options that include mechanisms to spread the financial risk that insurers bear, as well as “reinsurance” to provide a backstop against deep losses.

The search for solutions is urgent, with cost-drivers including an aging population that will require more care.

For years, we’ve expressed concern about what happens when backloaded ACA costs hit the system. As the bills arrive, we’re finding out.

 

— St. Paul Pioneer Press, Oct. 3