Tag: "ObamaCare"

Pittsburgh Insurer Highmark Swings for the Fences on Obamacare Bailout

1(A version of this Health Alert was published by Forbes.)

Health insurers have not had much to cheer about lately, when it comes to Obamacare. They have been losing money on exchanges, and there is little hope that will change. So, a large health plan in Pittsburgh has asked judges to give it Obamacare money the Administration promised, but Congress declined to appropriate.

As reported by Wes Venteicher and Brian Bowling of the Pittsburgh Tribune-Review, Highmark lost $260 million on Obamacare exchanges in 2014, and claims it is owed $223 million by taxpayers. Unfortunately, it received only about $27 million. And things are getting worse. To date, Highmark has lost $773 million on Obamacare exchanges.

It is not that Highmark has been singled out by anybody. On the contrary, the Administration announced last year it was only going to pay about 13 cents on the dollar for all insurers’ exchange losses, via Obamacare’s “risk corridors.” This was not the Administration’s preferred course of action. The Administration wanted to pay insurers one hundred cents on the dollar, which it had promised them.

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May 18, 2016 | 19 comments | by

Federal Health Bureaucracy Growing? Don’t Blame (Just) Obamacare

Libertarians and conservatives and others have spent five years complaining about the increased bureaucratic burden of Obamacare. New research by Sam Batkins of the American Action Forum, while not letting Obamacare off the hook, shows the problem predates the current Administration. The following chart shows the burden of paperwork has increased linearly since at least 2005:

20160509 Batkins AAF

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May 12, 2016 | 3 comments | by

Taxpayers Increasingly Victimized in Obamacare Exchanges

-18(A version of this Health Alert was published by The Hill.)

Recent news has renewed attention on Obamacare’s health insurance exchanges (misleadingly called “marketplaces” by the Administration).

America’s largest health insurer, UnitedHealth Group, will all but withdraw from the Obamacare exchange business. Having sold plans in 34 states this year, the company will participate in only a “handful” next year. With 795,000 beneficiaries, UnitedHealth Group indicates it will lose $650 million in the exchanges this year – over $800 per enrollee.

Other insurers are sticking it out. Notably, Anthem, another leading for-profit insurer, which has nearly one million Obamacare enrollees, is positive about its future in the exchanges. In its latest quarterly earnings call, Anthem anticipated a profit of three to five percent. However, that is not likely to happen until 2017. Further, the insurer said it needs the federal government to take unspecified actions to “stabilize” the market. Anthem’s optimism is surprising.

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May 11, 2016 | 24 comments | by

Health Insurers Shift More Costs To Taxpayers In Obamacare Exchanges

money-burden(A version of this Health Alert was published by Forbes.)

America’s health insurers are undergoing a crisis of consensus with respect to their engagement with Obamacare. Between 2010 (when the Affordable Care Act was signed), and 2014 (the first year of taxpayer-subsidized coverage in the health insurance exchanges), it was widely understood that health insurers had scored a big win. After all, which other industry could get the federal government to pass a law mandating individuals purchase its product or service as a condition of residency in the United States?

This view was reflected in the stock market’s valuation of health insurers, which outperformed the S&P 500 Index. Since then, of course, we have learned that insurers have been losing money on Obamacare’s exchanges. Further, they have lost the sympathetic ear of the Congressional Republican majority, which has prevented insurers extracting as much taxpayer funding as they had expected from the Treasury. We should not expect insurers which continue to participate in exchanges to just keep losing money. In fact, the evidence indicates some insurers have quickly learned how to shift more costs onto taxpayers, despite failing to win an explicit political commitment to do so.

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May 04, 2016 | 15 comments | by

Administration Still Bailing Insurers Out of Obamacare Exchanges

money-rollsThe Obama Administration refuses to concede defeat in its struggle to save Obamacare’s exchanges. The exchanges lost one quarter of their members in 2015. The Blue Cross Blue Shield Association has reported its insurance plans have enrolled people significantly sicker (and more expensive) than anticipated. Finally, UnitedHealth Group, the nation’s largest insurer, will drop out of most of the exchanges in which it is participating.

Desperate to induce insurers to continue participating in exchanges, the Administration suggested it would make illegal payments from “risk corridors,” a risk-mitigation mechanism that moves money between insurers to stabilize their profits in Obamacare’s first three years. Republicans in Congress put a stop to that in 2014. So, the Administration proposes apparently illegal payments from another risk-mitigation fund, called “reinsurance.”

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Apr 21, 2016 | 26 comments | by

Obamacare’s Unintended Consequences: People Buy Short-Term Policies

woman-with-childObamacare has driven individual health insurance premiums up so high people are forgoing comprehensive coverage in favor of short-term policies:

Robin Herman, the 34-year-old owner of a marketing firm in San Francisco, bought a short-term policy in December. The monthly cost of her short-term coverage, plus conventional ACA-compliant plans for her two children, is roughly one-quarter of what she would have paid for conventional health plans covering all three of them, she says.

“This is saving me a ton of money for the year,” she said, despite the penalty. Plans that comply with the health law’s rules cost more than her old pre-ACA policy and are “just not affordable,” she said.

(Anna Wilde Mathews,” Sales of Short-Term Health Policies Surge,” Wall Street Journal, April 10, 2016.)

Sales of these policies have doubled or more since 2014, according to sources cited by Ms. Mathews. This surely feeds into the problem that Obamacare enrollees are sicker than expected: The healthy candidates are choosing these policies.

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Apr 19, 2016 | 20 comments | by

Blue Cross Blue Shield Association Confirms Obamacare Death Spiral

CAM00109The Blue Cross and Blue Shield Association, which represents 36 Blue Cross and Blue Shield plans covering 105 million Americans has released a study of its members’ claims data in Obamacare exchanges 2014 and 2015. It confirms Obamacare exchange enrollees are sicker and more expensive than enrollees in pre-Obamacare individual plans or employer-based plans:

Members who newly enrolled in BCBS individual health plans in 2014 and 2015 have higher rates of certain diseases such as hypertension, diabetes, depression, coronary artery disease, human immunodeficiency virus (HIV) and Hepatitis C than individuals who had BCBS individual coverage prior to health-care reform.

Consumers who newly enrolled in BCBS individual health plans in 2014 and 2015 received significantly more medical care, on average, than those with BCBS individual plans prior to 2014 who maintained BCBS individual health coverage into 2015, as well as those with BCBS employer-based group health insurance.

The new enrollees used more medical services across all sites of care—including inpatient admissions, outpatient visits, medical professional services, prescriptions filled and emergency room visits.

Medical costs of care for the new individual market members were, on average, 19 percent higher than employer-based group members in 2014 and 22 percent higher in 2015. For example, the average monthly medical spending per member was $559 for individual enrollees versus $457 for group members in 2015.

These health plans have not done a great job containing costs in employer-based health plans either. Those policies’ average monthly health spending increased 8 percent in the first nine months of 2015 versus 2014. However, costs in individual policies increased 12 percent, half again as much. This means the gap in medical spending between the two markets is increasing.

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Apr 07, 2016 | 14 comments | by

CBO: Obamacare’s Uninsured Up 5 Million, Medicaid Dependents Up 16 Million Since Initial Estimate

half full or half empty?

(A version of this Health Alert was published by Forbes.)

Last week’s Congressional Budget Office’s Updated Budget Projections: 2016 to 2026 significantly reduced estimates of Obamacare’s benefits, relative to CBO’s estimates published in 2010, when the law was signed:

  • In 2010, CBO estimated Obamacare would leave 22 million uninsured in 2016 through 2019. This month, CBO estimates Obamacare will leave 27 million uninsured through 2019 – an increase of almost one quarter.
  • In 2010, CBO estimated Obamacare would leave 163 million with employer-based health benefits in 2016 and 159 million in 2019. This month, CBO estimates Obamacare will leave only 155 million with employer-based plans. The number will decrease to 152 million in 2019.
  • In 2010, CBO estimated Obamacare exchanges would enroll 21 million people in 2016, increasing to 24 million in 2019. This month, CBO estimates Obamacare’s exchanges will enroll only 13 million people this year, and 20 million in 2019.
  • In 2010, CBO estimated Obamacare would result in 52 million Americans remaining or falling into dependency on Medicaid or the Children’s Health Insurance Program, the welfare programs jointly funded by state and federal governments that subsidizes low-income households’ health care, in 2016. CBO estimated that figure would drop slightly to 51 million in 2019. This month, CBO estimates 68 million will be dependent on the program this year through 2019 – an increase of almost one third in the welfare caseload.

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Mar 30, 2016 | Leave a Comment | by

One Quarter of Obamacare Enrollees Dropped Out in 2015

people-in-waiting-roomThe administration recently announced 12.7 million people selected or were automatically enrolled in an Obamacare exchange plan at the end of the third open season – February 1. Except for special cases, anyone who missed that deadline cannot enroll in an Obamacare plan for 2016.

That is a few more people than the 11.7 million than at the end of 2015’s open enrollment. However, the administration also announced that only 8.8 million people remained enrolled in Obamacare on December 31, 2015. That is a drop of almost one quarter from the end of 2015 open enrollment.

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Mar 18, 2016 | 33 comments | by

Whither Obamacare’s Death Panel?

elderly-man-worriedPresident Obama’s nomination of Merrick Garland to the U.S. Supreme Court has not shaken Senate Republicans from their commitment not to hold confirmation hearings for any candidate President Obama might nominate to the Supreme Court in the last eleven months of his second term.

Given the high drama and politics surrounding presidential appointments that require Senate confirmation, it might be a good time to ask why another 15-member “court,” which President Obama himself established in 2010, and which was supposed to deliver its first decision in January 2014, has not yet seen its first member nominated!

This “court” is the almost forgotten “death panel,” officially named the Independent Payment Advisory Board (IPAB). Based on a target rate of Medicare spending per capita, the IPAB was supposed to start cutting Medicare payments to providers in 2015.

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Mar 17, 2016 | 6 comments | by
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