ObamaCare’s impact on health costs.
Coping with ever-increasing medical bills is frustrating — and getting more so..
A recent survey by private health insurance exchange EHealth highlights the pressure Americans are feeling. It found that more than 6 in 10 people say they’re more worried about the financial effect of expensive medical emergencies and paying for healthcare than about funding retirement or covering their kids’ education.
People who get health insurance through work and on their own have seen their costs rise dramatically over the last decade.
According to the Commonwealth Fund, a New York think tank, annual increases in work-based health plan premiums rose three times faster than wages from 2003 to 2013. Out-of-pocket costs have also been climbing.
“More people have deductibles than ever before,” says Sara Collins, a Commonwealth Fund vice president. From 2003 to 2013, the size of deductibles has grown nearly 150%.
Whether a person is coping with a severe illness or trying to deal with everyday medical costs, the challenges are many.
Can government get people to buy a product that millions think isn’t worth the price?
That’s the question that health care analysts are asking as they pore over the results of the Obamacare open season that concluded on February 15.
On the surface, the data released earlier this month by the Department of Health and Human Services are encouraging. Nearly 11.7 million people selected a plan this year, compared with just more than 8 million during the 2014 open season.
There are some cautionary signs. Despite the influx of new subscribers, the age profile continues to skew older. Nearly half are 45 or older and 26 percent are over 55. Interest among the young remains largely unchanged over last year.
So is interest among middle income people who lack coverage. Enrollment has been dominated by those with the lowest incomes. HHS reports that 83 percent of people who have selected plans have incomes between 100 percent ($11,770) and 250 percent ($29,425) of the federal poverty level (FPL). Medicaid, meanwhile, has grown by nearly 20 percent since Obamacare was launched, swelling its ranks to 70 million. Roughly 22 percent of the U.S. population is now on Medicaid, despite the refusal of 22 states to expand their programs.
Two reports released in the past week demonstrate a potential bifurcation in state insurance exchanges: The insurance marketplaces appear to be attracting a disproportionate share of low-income individuals who qualify for generous federal subsidies, while middle- and higher-income filers have generally eschewed the exchanges.
On Wednesday, the consulting firm Avalere Health released an analysis of exchange enrollment. As of the end of the 2015 open-enrollment season, Avalere found the exchanges had enrolled 76% of eligible individuals with incomes between 100% and 150% of the federal poverty level—between $24,250 and $36,375 for a family of four. But for all income categories above 150% of poverty, exchanges have enrolled fewer than half of eligible individuals—and those percentages decline further as income rises. For instance, only 16% of individuals with incomes between three and four times poverty have enrolled in exchanges, and among those with incomes above four times poverty—who aren’t eligible for insurance subsidies—only 2% signed up.
The Avalere results closely mirror other data analyzed by the Government Accountability Office in a study released last Monday. GAO noted that three prior surveys covering 2014 enrollment—from Gallup, the Commonwealth Fund, and the Urban Institute—found statistically insignificant differences in the uninsured rate among those with incomes above four times poverty, a group that doesn’t qualify for the new insurance subsidies.
When Andy Slavitt reported for work as deputy administrator of the federal Centers for Medicare and Medicaid Services last June 10, he pocketed at least $4.8 million in tax-free income from major health-care companies.
That’s according to financial disclosure forms obtained by The Daily Caller, now published for the first time.
On June 27, he sold additional stock he personally held, raising his total windfall from the health industry to $7.2 million.
United Health Group was Slavitt’s most recent private sector employer.
The financial disclosure documents permit the public to examine for the first time Slavitt’s financial relationship with United Health Group, which is the largest health insurance company in the nation.
Kevin Pace is a jazz musician who teaches music appreciation in Northern Virginia. When the IRS announced it would impose the Affordable Care Act’s employer mandate here in the Old Dominion, Pace’s employer cut hours for part-time professors in order to avoid steep penalties. Pace lost $8,000 in income. That would be bad enough if the penalties the IRS is now imposing on Virginia employers were legal. Yet two federal courts have held they are not.
In King v. Burwell, four Virginia taxpayers are challenging the IRS’s decision to impose Obamacare’s major taxing and spending provisions in states that refused to establish a health-insurance “exchange.” As provided in the Affordable Care Act, the federal government established fallback exchanges (HealthCare.gov) in those states.
But the act authorizes premium subsidies — and certain taxes that those subsidies trigger — only “through an Exchange established by the State.” In spite of that clear statutory requirement, the IRS is issuing premium subsidies and imposing those taxes in 34 states, including Virginia, that did not establish exchanges. The King challengers allege the IRS is subjecting them, Kevin Pace and 57 million other Americans to illegal taxes in the form of Obamacare’s individual and employer mandates. The Supreme Court heard oral arguments earlier this month, and will likely rule by June.
Times-Dispatch columnist A. Barton Hinkle’s “The case against Obamacare is looking weaker,” March 23 — is skeptical of the challengers’ claim that Congress intended to authorize the disputed taxes and spending only in states that established exchanges. I used to share his skepticism. I no longer do.
Breaking with normal tradition, we’re going to open this week’s update with national trends before moving into updates at the federal and state levels. This week there was an interesting report from the Kaiser Family Foundation that estimated that 50 percent of households receiving financial assistance to purchase private health insurance on the Marketplaces will have to return a portion of that subsidy when they file their tax returns as part of the tax credit reconciliation process. Repayments will, in most cases, be deducted from an enrollee’s refund check and the Kaiser report estimates that the average repayment will be $794. Roughly seven percent of enrollees could owe a repayment of between $2,000 and $5,000 and two percent could have to repay more than $5,000. A slightly smaller percentage of households, 45 percent, are estimated to receive additional money with their tax refund because they received underpayments in tax credits, with the average refund estimated to be $773. Kaiser’s report comes the same week as an unrelated but equally insightful analysis from Avalere found that for Open Enrollment 2 (OE2), ACA Marketplaces were primarily successful in enrolling lower-income persons eligible for subsidized coverage. The report found that as a person’s income went up, they were less likely to enroll in ACA coverage through a Marketplace, with only two percent of persons eligible for Marketplace coverage, but earning more than the amount to receive a subsidy, enrolled in a plan through a Marketplace.
With many Marketplaces and the Federally-facilitated Marketplace currently offering a Special Enrollment Period (SEP) for those currently uninsured who did not have health coverage in 2014 and are subject to the “shared responsibility payment” when they file their 2014 taxes, there have been few updates on how many eligible persons are taking advantage of this opportunity to gain coverage. However, over the weekend Mark Ciaramitaro, a vice president of health-care enrollment services at H&R Block, told the Wall Street Journal “that a significant percentage of taxpayers whose household members were not covered for at least a portion of 2014 are opting” to pay the penalty for not having coverage and not demonstrating an interest in signing up for 2015 coverage.
Six Democratic senators and one independent have asked the Department of Health and Human Services to a delay a new rule that would likely force small businesses to pay more for employee health insurance under the Affordable Care Act, aka Obamacare. The senators warn that if the administration goes ahead with the change it would be “particularly harmful and disruptive” to small businesses.
Starting in 2016, the Obamacare change will require businesses that employ between 51-100 people to purchase insurance in what the government defines as the “small group market,” rather than the market for large group plans. The senators warn that the change will inflate health care costs for those businesses.
“[T]hey could experience higher premiums, less flexibility, and new barriers to coverage. We therefore encourage you to delay the effective date in the definition change for two years so the market can more smoothly transition to the new rules,” the senators wrote in the March 12 letter to HHS Secretary Sylvia Burwell.
What Were the Top 5 Fails from 5 Years ofACA?
Here are some of the top actual practices of the ACA thatdiverge from what we were promised:
1. PolitiFact “Lie of the Year”: “If you like your health care plan, you can keep it.”
The Obama Administration and many Democratic members of Congress repeatedly assured Americans that “If you like your health care plan, you can keep it.” PolitiFact rated this the “Lie of the Year for 2013” after cancellation notices went out to 4 million people. (PolitiFact)
2. “If you like the doctor you have, you can keep your doctor, too.” Not.
In June 2009, President Obama said, “If you like the doctor you have, you can keep your doctor, too.” But nearly five years later, the president admitted that Americans might lose their doctors after all. (WebMD Exclusive Interview). This is a broken promise that many ObamaCare enrollees will face, given that 70 percent of ObamaCare plans are narrow or ultra-narrow network plans, compared to 23 percent of employer-sponsored plans. (Washington Post)
The Congressional Budget Office’s new report shows updated cost projections for the insurance coverage expansion in the Affordable Care Act. With the debate over the ACA remaining so intensely polarized, advocates moved aggressively to spin this routine update as reflecting favorably on the law. A front-page article in the Washington Post referred to the new findings as showing “savings,” quoting a supporter as saying, “I can’t see how people can continue to say . . . that Obamacare had no cost containment in it.” Such comments in the wake of CBO’s update are flawed interpretations of the new estimates and what they signify. The following explains what CBO has actually projected: basically that the ACA will do less to expand coverage than previously estimated.
Health care premiums are continuing to rise in 2015. While the pace of change has slowed since the dramatic increases of 2014, the savings promised under the Affordable Care Act (ACA) have still not materialized.
Measuring changes in premiums is an important element in understanding the impact of the ACA. In previous analysis, The Heritage Foundation determined that the new regulations and benefit mandates put in place through the ACA caused premiums to increase drastically in 2014, with average premiums increasing more than 50 percent in some states. This Issue Brief examines premium changes in 2015 and finds continued but slower premium growth, indicative of a market going through a sorting process.