The Bureau of Insurance hoped to stem Community Health Options’ losses, partly by ending as many as 17,000 policies, but CMS rejected the temporary plan.
Eric Cioppa, the state’s insurance regulator, wrote in the letter to CMS, his bureau “would have acted to reduce membership, increase capital and thereby better protect the remaining (co-op) members and their health care providers from the risk presented by the type of losses experienced in 2015. Because CMS’s decision has precluded my ability to act as proposed, CMS now must share responsibility for the risk of an outcome we all very much hope to avoid.”
Along with releasing end-of-the-year 2015 enrollment data for the Affordable Care Act exchanges last Friday afternoon, the Department of Health and Human Services also released data for the 2016 open enrollment period. Just like the end-of-the year 2015 enrollment data, which I discussed on Monday, a close look at the 2016 open enrollment data reveals that the ACA is significantly underperforming initial expectations.
The big story is how little has changed from 2015 to 2016. The number of 2016 exchange enrollees is up only slightly from last year, and the make-up of the risk pool—as proxied by income and age of enrollees—is virtually identical.
The Federal government wants to leave doctors and hospitals on the hook for medical bills unpaid by the failed ObamaCare co-ops.
A top official at the Centers for Medicare and Medicaid Services told Congress that the government, not medical providers, has the first right to any remaining co-op funds. This CMS policy ignores a 1993 U.S. Supreme Court decision that says the federal government is next to last in line for payment in insurance cases, and policyholders should come first.
Twelve of the 24 co-ops funded through the ACA have failed and are going through the liquidation process. At least 800,000 people have had to find other coverage after their co-op policies were cancelled.
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Hundreds of thousands of people lose subsidies under the health law, or even their policies, when they get tangled in a web of paperwork problems involving income, citizenship and taxes. Some are dealing with serious illnesses like cancer. Advocates fear the problems, if left unresolved, could undermine the nation’s historic gains in health insurance.
Coverage disruptions due to complex paperwork requirements seem commonplace in the health law’s system of subsidized private insurance, which currently covers about 12.7 million people.
The government says about 470,000 people had coverage terminated through Sept. 30 last year because of unresolved documentation issues involving citizenship and immigration. During the same time, more than 1 million households had their financial assistance “adjusted” because of income discrepancies. Advocates say “adjusted” usually means the subsidies get eliminated.
The number of people who signed up for health insurance for 2016 on the state and federal exchanges was up to 40% lower than earlier government and private estimates, which some say is evidence that the plans are too expensive and that people would rather pay a penalty than buy them.
In 2010, the non-partisan Rand Corporation estimated 27 million people would have exchange policies this year and the Congressional Budget Office at that time was estimating 21 million for 2016. CBO even said last June that 20 million people would have plans purchased on the exchanges this year. Just 12.7 million signed up for plans, however, by the end of open enrollment Jan. 31 and about 1 million people are expected to drop their plans—or be dropped when they don’t pay their premiums.
A reason that might explain why fast-food employees aren’t getting more hours: ObamaCare.
Starting Jan. 1, businesses with 50 or more full-time employees must offer health insurance to all full-time staff or pay a hefty fine. Employers with 100 or more workers had to start offering coverage last year. But smaller businesses that operate on lower margins, especially restaurants, complained loudly about the cost.
And some fast-food franchise owners figured out a way to avoid paying for coverage: Just make as many workers as possible part time. A U.S. Chamber of Commerce survey found nearly 60% of small franchise businesses said they would make personnel changes like this.
“The ones that did it successfully did it three or four years ago,” says Kaya Bromley, an attorney who helps employers comply with the Affordable Care Act. But, Bromley said, some of the restaurant owners who cut hours to sidestep the health law now regret it.
“A lot of the fast-food franchisees that did this,” she said, “are now coming back and saying, ‘It was a great idea for reducing the number of people that I have to offer benefits, but now I can’t run my restaurants.’”
Freedom Partners Chamber of Commerce has analyzed all publicly available information for health-insurance premiums from healthcare.gov and state insurance departments. It then calculated the weighted averages for all health-insurance plans available on the Affordable Care Act’s exchanges. The weighted average gives a more accurate view of overall premium increases, because it takes into account each insurance plan’s market share.
Findings reveal that nationally, premiums for individual health plans increased on average between 2015 and 2016 by 14.9%. Consumers in every state except Mississippi faced increased premiums, and in no fewer than 29 states the average increases were in the double digits. For a third of states, the average premiums rose 20% or more.
One of the many factors that can cause a health insurance system to fail is “adverse selection,” a phenomenon in which those who know they will make higher-than-average claims are disproportionately likely to enroll and pay premiums. The inevitable results is a rapid increase in premiums, which encourages even more marginal consumers to forgo insurance, leaving average claims, and therefore premiums, to increase even further.
One approach to limit this problem is to limit the time frame during which enrollment is permitted. Why have limited open enrollment periods? The idea is that without them – that is, if anyone could enroll in health plans whenever they want – people could “game the system,” enrolling when they need health care, and disenrolling when they don’t.
The House GOP emerged from its retreat earlier this month united in its goal to come up with an alternative to Obamacare. But the deeper into health policy the members dig, the more difficult finding consensus will become.
Republicans have determined that they will select pieces of different GOP proposals rather than simply put forth one of the party’s old plans as its main health proposal. The older conservative health plans are unworkable in a post-ACA world.
The Obama administration’s top health insurance official told Congress Thursday he wants to “loosen up capital rules” to allow private investors to become part owners of the dozen surviving ObamaCare co-ops.
Andy Slavitt, the acting administrator for the Centers for Medicare and Medicaid Services which oversees the ObamaCare co-ops, told the Senate Finance Committee that his agency would also look approvingly on co-op mergers with existing insurance companies.
The new private investment policy represents a major reversal for the Obama administration, which has previously hailed the non-profit co-op health insurance model as a tool for providing competition to private, for-profit insurers.