Last week, the Department of Health and Human Services (HHS) released the payment amounts that some insurers owe and some insurers will receive through the Affordable Care Act (ACA) risk adjustment program. As the law’s implementation moves forward, it is increasingly clear that the controversial risk adjustment program presents a fundamental trap, a sort of “damned if you do, damned if you don’t” scenario. To the degree that risk adjustment works, insurers individually lack the incentive to enroll the young and healthy people needed for the ACA’s complicated structure to survive. To the degree that risk adjustment doesn’t work, large arbitrary transfers between insurers occur that produce significant uncertainty in the market.
The risk adjustment program is budget neutral—within each state insurers with healthier enrollees pay the aggregate amount that insurers with less healthy enrollees receive—and is intended to make insurers more-or-less indifferent to the health status of their enrollees. The Obama administration appears to recognize the importance of risk adjustment for the ACA’s future as HHS recently convened a day-long conference and released a 130-page paper on the subject. This conference was partially motivated by the strong complaints, particularly by newer and smaller insurers, that the program unfairly benefits large, established insurers.
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Connecticut’s financially “unstable” Obamacare health-insurance co-op was placed under state supervision on Tuesday, as regulators said 40,000 people covered by the company will ultimately have to find new plans for the coming year.
HealthyCT is the 14th of 23 original Obamacare co-ops to fail since they began selling health plans on government-run Affordable Care Act insurance exchanges. Several of the other remaining co-ops, at least, are believed to be on shaky financial ground.
Until last week, the nonprofit HealthyCT had “adequate capital and sustainable liquidity” — but that fell apart Thursday with a federal requirement that hit HealthyCT with a $13.4 million bill, according to the Connecticut Insurance Department.
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This refrain may sound familiar: If you qualify for Medicaid but you like your “Obamacare” plan, you can keep it … unless you can’t.
That’s the confusing and mixed message residents are getting from the state and insurance companies now that Louisiana has become the 31st state to expand Medicaid coverage under the Affordable Care Act.
About 375,000 people — mostly the working poor — are expected to get free health insurance coverage through the expanded program, which is mostly subsidized by the federal government.
Tens of thousands of those Louisiana residents — the total is not known — already have health insurance policies through what is called the federal marketplace, an Obamacare program that pays most of their insurance premiums.
The state says people who bought individual policies through the federal marketplace but now qualify for Medicaid under the state expansion can keep their Obamacare plans if they prefer them over Medicaid. They just have to keep paying their share of the premiums.
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Small, regional health insurers and upstart co-op plans again incurred large charges under the Affordable Care Act’s risk-adjustment program, according to new data the CMS released Thursday. Calendar year 2015 marks the second year of risk adjustment, and many smaller insurers have had to pay into the program both years.
The data also show payouts for the ACA’s reinsurance program. For ACA plans sold in 2015, the reinsurance payments total $7.8 billion. The temporary reinsurance program, which expires at the end of this year, protects health insurers against costly claims.
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Insurers helped cheerlead the creation of Obamacare, with plenty of encouragement – and pressure – from Democrats and the Obama administration. As long as the Affordable Care Act included an individual mandate that forced Americans to buy its product, insurers offered political cover for the government takeover of the individual-plan marketplaces. With the prospect of tens of millions of new customers forced into the market for comprehensive health-insurance plans, whether they needed that coverage or not, underwriters saw potential for a massive windfall of profits.
Six years later, those dreams have failed to materialize. Now some insurers want taxpayers to provide them the profits to which they feel entitled — not through superior products and services, but through lawsuits.
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ObamaCare enrollment dropped to about 11.1 million people at the end of March, according to new figures released by the administration.
A dropoff was expected, and has occurred in previous years as well, given that some people who sign up do not pay their premiums.
The CMS said 87 percent of enrollees remained signed up, within the expected range of 80 percent to 90 percent retention.
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The health care law President Obama signed six years ago was supposed to fix the individual insurance market with enlightened rules and regulations. Instead, ObamaCare is destroying this market. Just look at what’s happening to Blue Cross Blue Shield.
If any insurer could cope with ObamaCare, it should have been Blue Cross Blue Shield.
Blue Cross companies came into the ObamaCare exchanges with decades of experience writing individual policies. Most of them are non-profits, which gives them an automatic leg up on the competition. And their plans captured the largest share of the exchange markets across the country.
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Two major health insurers in Arizona are discontinuing Obamacare plans in part of the state next year.
Blue Cross Blue Shield of Arizona and Health Net will stop selling plans on the Affordable Care Act marketplaces in the city of Maricopa and Pinal County, dropping coverage for tens of thousands of enrollees, according to new state filings reported by the Arizona Republic.
Additionally, Health Net is scaling back its Obamacare offerings in Pima County, selling only mid-level silver and gold marketplace plans.
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Nearly 22,000 Ohioans — more than one-third of whom live in the Columbus area — have until Thursday to find a new health insurance plan or face being uninsured for most of July.
The Ohio Department of Insurance took over InHealth Mutual, a subsidiary of Coordinated Health Mutual, in May. The health insurance cooperative based in Westerville was set up in 2014 to be a lower-cost option for Ohioans who shop the federally run health insurance marketplace. The state agency is liquidating the company because it ceased to meet the federal requirements for minimum essential coverage under the Affordable Care Act.
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Insurers from Oregon to Pennsylvania, including a failed health-care co-operative and two long-established Blues plans have lost billions of dollars selling Obamacare policies. Now they are suing the federal government to recoup their losses. In a testament to industry desperation, insurers are asking federal judges to simply ignore a congressional ban on the payment of these corporate subsidies.
The regulatory atrocity that is Obamacare inspired this race to the courthouse. Despite billions in subsidies — to both low-income individuals and well-capitalized insurance companies — the industry has incurred big losses in the individual market.
In a paper published June 28 by the Mercatus Center, Brian Blase (Mercatus), Ed Haislmaier (Heritage Foundation), Seth Chandler (University of Houston), and Doug Badger (Galen Institute) used data derived from insurance-company regulatory filings to determine the extent and source of those losses. The study examined the performance of 174 insurers that sold qualified health plans (QHPs) in 2014 to both individuals and small groups (generally companies with 50 or fewer workers).
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