A nearly $150 million bill from the federal government has taxpayer-funded Obamacare plans angry, with some experts wondering if more co-ops could shut down in the coming months.
When the Obama administration last week announced payments under the risk adjustment program for the 2015 benefit year, the news wasn’t good for the 10 Obamacare consumer oriented and operated plans, or co-ops, that remain out of the 23 original plans, which owe more than $150 million to the government.
On Tuesday, the payments claimed one victim, as Connecticut’s insurance regulator shut down the HealthyCT co-op after it learned it owed $13.4 million in risk adjustment payments.
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With insurers struggling to make money and access to plans severely limited, top South Carolina health officials warn the Obamacare health insurance marketplace is on the verge of collapse.
Obamacare was supposed to create a competitive platform for customers to shop for coverage. But in most South Carolina counties, HealthCare.gov more closely resembles a monopoly dominated by the largest private health insurance company in the state — BlueCross BlueShield.
Next year, access to Obamacare in South Carolina will likely become even more limited. United Healthcare, which sells Affordable Care Act plans in five counties and in several other states, has announced it will leave most markets in 2017. The company estimates it lost $475 million on Obamacare customers across the country last year.
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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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