Tag: "health insurance exchange"

15 Percent of Obamacare’s Second Season Enrollees Were Gone by June 30

Obamacare’s second enrollment season closed around the end of February, with 11.7 million signed up. By March 31, that had dropped to 10.2 million who actually paid their first month’s premium. New data from the administration report that number dropped further to 9.9 million by June 30.

What is also notable is that the entire drop of paid enrollees occurred in states using the federal exchange, not state-based exchanges (for which enrolment stayed at 2.7 million). There is no word on whether the drop-outs got employer-based coverage, descended into Medicaid, or stayed uninsured. 423,000 were dropped by the administration because of lack of documentation of citizenship or immigration status.

A stable market? Not quite, I guess.

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Commonwealth Fund’s Red Herring on Obamacare Risk Selection

One of this blog’s consistent themes is that Obamacare encourages insurers to seek to enroll health people in exchanges, and shun sick people. A new study from the Commonwealth Fund insists that is not the case, concluding that “insurers aren’t seeking lower-risk customers outside the ACA exchanges as some feared,” and “the ACA’s insurance reforms are working in the individual market.”

I will share the study’s conclusion, then explain the red-herring hypothesis it is meant to test:

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Obamacare Exchanges: Trusted, Verified, Disliked

Remember Ronald Reagan’s principle for negotiating arms deals with the Soviet Union? “Trust, but verify.”

Well, Obamacare customers have trusted and verified the insurance policies they can buy on Obamacare’s exchanges, but they don’t like what they get. This according to a survey conducted by the Deloitte Center for Health Solutions:


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Obamacare Exchange Plans Have 34 Percent Fewer Providers than Commercial Plans

Avalere Health has quantified how narrow networks are in Obamacare exchange plans, as shown in the figure below:


According to Avalere CEO President Dan Mendelson: “Plans continue to test new benefit designs in the exchange market. Given the new requirements put in place by the ACA, network design is one way plans can drive value-based care and keep premiums low.” Well, that is one way to look at it and I hope Mr. Mendelson is right.

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What King v. Burwell Means for California’s Obamacare Exchange

(A version of this op-ed was published by the Orange County Register.)

It is usually not a good idea to take the risk of predicting what politicians and bureaucrats will do, but here’s a shot: California will decide to wind down the failing Covered California Obamacare exchange and transfer its operations to healthcare.gov, the federal exchange. That won’t solve any of the fundamental problems of Obamacare itself, but at least it will relieve the state of a problem child.

California established Covered California because the Affordable Care Act, passed in 2010, only allows tax credits to be paid to health insurers in exchanges established by states. These tax credits are the only way to make the expensive Obamacare plans affordable to beneficiaries. All but 16 states and D.C. rejected Obamacare and declined to establish exchanges. That did not stop the federal government, which set up healthcare.gov to funnel tax credits to health insurers in the majority of states without exchanges.

On June 25, the U.S. Supreme Court decided King v. Burwell, rewriting the law to allow the federal government to continue to pay tax credits through healthcare.gov. Although a disappointment for the rule of law, the decision gives California an off-ramp from the exchange business.

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Obamacare Payments to Health Insurers Wildly Inaccurate

debtThe Office of the Inspector General of the U.S. Department of Health & Human Services has concluded that the administration has no clue if the billions of dollars it is paying to health insurers as Obamacare tax credits and cost-sharing subsidies are accurate:

We determined that CMS’s internal controls (i.e., processes put in place to prevent or detect any possible substantial errors) for calculating and authorizing financial assistance payments were not effective. Specifically, we found that CMS:

  • relied on issuer attestations that did not ensure that advance CSR payment rates identified as outliers were appropriate,
  • did not have systems in place to ensure that financial assistance payments were made on behalf of confirmed enrollees and in the correct amounts,
  • did not have systems in place for State marketplaces to submit enrollee eligibility data for financial assistance payments, and
  • did not always follow its guidance for calculating advance CSR payments and does not plan to perform a timely reconciliation of these payments.

The internal control deficiencies that we identified limited CMS’s ability to make accurate payments to QHP issuers. On the basis of our sample results, we concluded that CMS’s system of internal controls could not ensure that CMS made correct financial assistance payments during the period January through April 2014.

Just another day of Obamacare news.

Pa., Del. to Identify as State-Based Exchanges

There seems to be a trend in the United States of people formerly identifiable as a person with one set of easily recognized characteristics deciding that they “identify” as having another set of characteristics.

This is also happening with Obamacare exchanges. The Supreme Court will soon announce its decision in King v. Burwell, resolving the question of whether Obamacare tax credits can be paid in states using the federal exchange (healthcare.gov) or only states with their own exchanges. Some states with federal exchanges are trying to “identify” them as state exchanges.

Pennsylvania is one. Delaware is too, but it is called a State Partnership Marketplace. These State Partnership Marketplaces are not defined in the Affordable Care Act. The law defines clear blue sky between state and federal exchanges, and that tax credits can only flow through state exchanges. This difference was supposed to create the incentive for states to establish exchanges. It did not work.

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More on Obamacare’s Double Digit Rate Hikes

Yesterday, I pointed out that this blog would have room for nothing else if we discussed every local newspaper’s coverage of how Obamacare’s outrageous 2016 rate hikes were going to hit their community. Well, the House Speaker John Boehner’s office collected and summarized many of the articles, from the Wall Street Journal to the Wichita Eagle; from the New York Times to the Fayetteville Observer.

Insurance expert Bob Laszewski corroborates my conclusion from yesterday: It is surprising that insurers are asking for such “eye-popping” premium hikes while they still have taxpayers’ protection from losses via Obamacare’s risk corridors and reinsurance:

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13 Percent of Obamacare’s 2015 Sign Ups Dropped Out A Month Later

The Administration released data on the status of enrollees in second open enrollment, which ended on February 22 (give or take a few days, depending on the state):

About 11.7 million Americans selected plans through the Health Insurance Marketplaces as of February 22, the end of the “in-line” special enrollment period for 2015 Open Enrollment for individual market coverage. On March 31, 2015, about 10.2 million consumers had “effectuated” coverage which means those individuals paid for Marketplace coverage and still have an active policy in the applicable month.

That’s a 13 percent drop-out rate within five weeks. Actually, I am happy to see if it those people got employer-based coverage, which has explained most growth in coverage over the last few years.

This shrinks the number of people who will be enrolled in health plans that will lose tax credits if the Supreme Court decides for the plaintiff in King v. Burwell. Sarah Kliff of Vox estimates it would now cost 6.4 million people their artificially low premia.

As it stands, the Administration reports that 8.7 million people are in plans that receive tax credits averaging $272 per month. That amounts to just under $30 billion annually.

Obamacare’s Double Digit 2016 Rate Hikes

iStock_000007047153XSmallIn Missouri, Coventry has asked for a 23 percent Obamacare rate hike next year:

Insurance brokers had considered the health plans sold by the Maryland-based insurer to be among the cheapest with the most extensive provider networks available to Missouri consumers.

But Coventry’s strategy appears to have caught up with it, and the insurer is now asking federal regulators to approve an average rate increase of 23 percent for plans sold in the St. Louis area. (Jordan Shapiro, “Coventry Health Care seeks double-digit price hike for health plans,” St. Louis Post-Dispatch, June 2, 2015)

But, hey, if I posted every article about eye-popping rate hikes in Obamacare exchanges next year, we’d have room for nothing else on this blog for the next few weeks. So, I’ll leave it to my Forbes colleague and Obamacare fan, Bruce Japsen, to roll up the whole story:

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