A new wave of failures among ObamaCare’s nonprofit health insurers is disrupting coverage for thousands of enrollees and raising questions about whether regulators could have acted earlier to head off some of the problems.
Four ObamaCare co-ops have failed due to financial problems since the beginning of the year, the latest trouble for the struggling program.
The co-ops were set up under ObamaCare to increase competition with established insurers, but just seven of the original 23 co-ops now remain.
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The Kaiser Family Foundation’s most recent Employer Health Benefits Survey found that among firms with 50 or more full-time-equivalent workers (i.e., the one’s subject to Obamacare’s employer mandate):
“four percent of these firms reported changing some job classifications from full-time to part-time so employees in those jobs would not be eligible for health benefits”
“four percent of these firms reported that they reduced the number of employees they intended to hire because of the cost of providing health benefits” . , and 10% of firms reported doing just the opposite and converting part-time jobs to full-time jobs”
This is unequivocal empirical evidence that Obamacare has had some of the adverse effects on employment predicted for years by Obamacare critics: a shift towards part-time work and even a reduction in hiring. But according to the same survey, the latter impact was offset due to the 10% of employers who converted part-time jobs to full-time jobs in order to make them eligible for health benefits.
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Small businesses have been pumping the brakes on offering health benefits to their employees since 2009, according to new data from the Employee Benefit Research Institute.
“The fact is that small employers were less likely to offer these benefits to begin with,” Paul Fronstin, EBRI’s director of health research and education program and author of the report, told Bloomberg BNA July 28. “While the ACA was designed to try to get more small employers to” offer health insurance, “it hasn’t.”
The proportion of employers offering health benefits fell between 2008 and 2015 for all three categories of small employer, EBRI found: by 36 percent for those with fewer than 10 employees, by 26 percent for those with 10 to 24 workers and by 10 percent for those with 25 to 99 workers.
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Since Obamacare’s rollout in the fall of 2013, 16 co-ops that launched with money from the federal government have collapsed.
The co-ops, or consumer operated and oriented plans, were started under the Affordable Care Act as a way to boost competition among insurers and expand the number of health insurance companies available to consumers living in rural areas.
Now, just seven co-ops—Wisconsin’s Common Ground Healthcare Cooperative; Maryland’s Evergreen Health Cooperative; Maine Community Health Options; Massachusetts’ Minuteman Health; Montana Health Cooperative; New Mexico Health Connections; and Health Republic Insurance of New Jersey—remain.
Thomas Miller, a resident fellow at the American Enterprise Institute who is an expert in health policy, said each of the seven remaining co-ops have “warning indicators” leading up to when, and if, they fail.
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Thousands of Illinoisans heeded federal law and bought health insurance last year via the state’s Obamacare exchange. They signed up with Land of Lincoln Health, a state-approved insurer. They paid their premiums and deductibles. Many counted on that coverage to manage chronic illnesses or other long-term treatment.
Now, a kick in the teeth: Land of Lincoln has collapsed. Its customers must scramble for new coverage in an upcoming “special enrollment” period. They will have 60 days to find another plan on the Illinois exchange to cover the last three months of the year.
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Humana will exit eight of the 19 individual health insurance markets where it has sold Obamacare plans this year, the insurer announced Thursday.
The company is still struggling to make a profit on the exchanges, according to its second quarter earnings guidance released Thursday. The company expects to offer individual plans in 156 counties across 11 states compared to the 1,351 counties in 19 states it has offered plans in the year, according to a release.
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The Illinois Insurance Department moved Tuesday to shut down Land of Lincoln because of its unstable financial health, leaving about 49,000 policyholders in a lurch. They will lose coverage in the coming months, but neither regulators nor the company have said exactly when.
Policyholders will be able to buy insurance from a different carrier to cover them for the rest of 2016, according to the state Insurance Department. But switching plans is going to cost them.
The co-pays and deductibles enrollees have been paying since January will not transfer to new plans. A new plan will reset deductibles and out-of-pocket maximums paid by consumers.
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Illinois moved Tuesday to take control of Land of Lincoln Health to begin an orderly shutdown of the insurance company, meaning about 49,000 people will lose their health coverage in the coming months.
The state said it will allow policyholders to buy coverage from a different insurer before their Land of Lincoln plans are terminated, but it’s unclear when the policies will lapse.
“It’s a bad day for the marketplace in Illinois and our consumers,” said Jason Montrie, president and interim CEO of Chicago-based Land of Lincoln. “This is the end.”
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The number of insurers carrying out one of the Affordable Care Act’s most idealistic goals continues to plummet, with just seven nonprofit member-run health plans set to take part in the law’s fourth enrollment season this fall.
That’s down from 23 such plans — co-ops, as they are commonly known — that started in 2014. Eleven are still in business, but four in Oregon, Ohio, Connecticut and Illinois will fold soon because of financial insolvency. Just Tuesday, the Land of Lincoln Mutual Health Insurance Co. was ordered to close by Illinois regulators.
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Oregon’s nonprofit ObamaCare health insurance co-op is winding down operations due to financial problems, the second such announcement this week for the troubled co-op program.
The announcement is just the latest in a long string of failures of ObamaCare’s co-ops, non-profit health insurers set up to increase competition with established insurers. Before this week, just 10 of the original 23 co-ops remained functioning, and Republicans have seized on the problems.
Oregon’s Department of Consumer and Business Services announced Friday that it is taking over the insurer, known as Oregon’s Health CO-OP, and will liquidate the company.
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