House Speaker Paul Ryan’s health care blueprint, released late last month as part of his “A Better Way” reform agenda, would deliver affordable, accessible health coverage at less cost and with less disruption to the health care market than Obamacare. Ryan’s plan would slash premiums by, among other things, getting rid of Obamacare’s costly essential-health-benefit mandates. People would be free to purchase low-cost plans that don’t cover procedures they don’t want or need. The plan would also make health coverage more affordable for middle class families by replacing Obamacare’s complicated scheme of subsidies with more straightforward, age-based, refundable tax credits.
. . .
CBO projects that the combined federal spending on Social Security, Medicare, Medicaid, and the ACA subsidies will grow from 11 percent of GDP in 2016 to 16.3 percent of GDP in 2046. This run-up in spending will increase annual federal budget deficits and push cumulative federal debt to 141 percent of GDP in 2046 — well past the point that most economists would consider dangerous for the economy. (Spain’s debt is 99 percent of GDP in 2016).
CBO’s base case scenario is also probably too optimistic. CBO’s projection assumes federal revenue will grow from 18.2 percent of GDP in 2016 to 19.4 percent in 2046 (the 50-year average of federal revenue, from 1966 to 2015, was 17.7 percent of GDP). But the projected growth in federal revenue derives from tax provisions that are sure to change in coming years. For instance, under the ACA, a new 3.8 percent tax was imposed on non-wage income for persons with incomes over $200,000 annually and on couples with incomes over $250,000 per year. These thresholds are not indexed, which means more and more taxpayers, and, eventually, the middle class, will pay this tax as their incomes grow naturally with inflation.
. . .
Humana is the latest health insurer to significantly pull back its participation selling subsidized individual coverage under the Affordable Care Act, announcing plans to scale back next year to “no more than 156 counties” across 11 states.
The decision means Humana will reduce its Obamacare geographic presence by nearly 1,200 counties from the 1,351 counties across 19 states where the insurer currently sells individual coverage on exchanges under the health law now. UnitedHealth Group is scaling back to three states and Aetna said this week it was evaluating its participation in 15 states and wouldn’t expand to new states next year.
. . .
Hospital system Catholic Health Initiatives’ experiment with health insurance has hit the end of the road after a couple years of heavy losses. CHI is “exploring options to sell” its health plan subsidiary, executives said in new financial documents.
The documents, released this week to bondholders, explain that top CHI executives “decided to exit the health insurance business” in May after undergoing a strategic review in March. CHI’s consolidated insurance division, QualChoice Health, formerly known as Prominence Health, has hemorrhaged money since its inception. QualChoice sells Medicare Advantage plans and commercial plans to employers in six states.
. . .
July has been rough for Obamacare’s non-profit co-op health plans. Four closed after running out of money — three in just one week. Just seven of the original 23 co-ops are still standing. Those seven all lost money last year — and may yet go out of business before the calendar turns to 2017.
All that failure has been pricey. Taxpayers are out $1.7 billion in federal loans that these co-ops will never pay back.
The co-ops stand out as perfect examples of how Obamacare’s idea of government-managed “competition” is doomed to fail.
. . .