Land of Lincoln Health, an insurance co-op created under ObamaCare, is no longer taking new small-business customers. The health insurer announced in October that it would severely cap enrollment on the exchange, HealthCare.gov, and limited new small-business clients in particular to help the co-op survive long term. More than half of the co-ops nationwide have failed.
The CEO of UnitedHealth, the nation’s largest health insurer, said on Tuesday he regretted the decision to enter the ObamaCare marketplace last year, which the company says has resulted in millions of dollars in losses. “It was for us a bad decision,” CEO Stephen Hemsley said at an investor’s meeting in New York, according to Bloomberg Business. UnitedHealth announced last month that it would no longer advertise its ObamaCare plans over the next year and may pull out of the exchanges completely in 2016.
Why is enrollment so low among families making significantly more than the poverty line? Part of the answer might be because ObamaCare itself imposes a significant series of new taxes on that same middle class, denying them the disposable income needed to purchase ObamaCare plans. A few of these tax increases include the Flex Spending Account Tax, the High Medical Bills Tax, the Medicine Cabinet Tax, the Individual Mandate Non-Compliance Tax, the Tanning Tax, and the Health Savings Account Withdrawal Tax.
The backlash over ObamaCare deductibles will only intensify as customers shopping for 2017 plans a year from now face bronze-plan deductibles as high as $7,150. The Department of Health and Human Services on Friday detailed many key ObamaCare parameters for 2017, including a $300, or 4.4%, rise in the maximum out-of-pocket expense for covered medical bills — not including premium payments — from $6,850 in 2016.
A Kaiser Health News analysis of costs in the three-dozen states selling policies through the federal healthcare.gov website found a sharp difference in premium prices between plans that offer out-of-network care and those that do not. The analysis compared the monthly premiums for the least expensive silver-level plans — the category that are the most popular purchases — for a 40-year-old in each county. While the average premium for the least expensive closed network silver plan—principally HMOs—rose from $274 to $299, a 9 percent increase, the average premium for the least expensive PPO or other silver-level open access plan grew from $291 to $339, an 17 percent jump, KHN found. The cost variations hold true for any age.
It is now well-established that many people buying health coverage through the ACA exchanges have to pay tens of thousands of dollars – counting both premiums and deductibles – before receiving a single dollar of coverage for treatment of any illness. The well-known prohibition on charging different rates for people with higher health risks obviously makes health coverage more attractive to people with chronic conditions or a history of serious illness. It is obvious that this would increase premiums, if these were the only people to enroll in the new plans. By making premiums independent of health status, it not only made coverage more attractive to people with health problems, but also made coverage less attractive to people who are perfectly healthy.
The demise of Health Republic, the largest of the nonprofit cooperatives created under ObamaCare, left its more than 215,000 enrollees scrambling to find new insurance. But New York’s physicians and hospitals say the shutdown has left them, too, in a lurch. The Medical Society of the State of New York, a physician’s association, said of 800 doctors surveyed, 43% have claims unpaid by the insurer. Of these, 18% said they were owed $25,000 or more.
The sudden collapse of the largest nonprofit insurance cooperative created under the Affordable Care Act is causing headaches in New York, especially for medical providers owed millions of dollars for treating the failed plan’s patients. Hospitals, doctors, and other clinicians are legally obligated to continue treating Health Republic patients through the end of the month but have been given no assurances they will ever be paid for that care.
Executives with Arizona’s nonprofit health insurance co-op said Tuesday that they have failed to come up with additional financial backing and the insurer plans to shut down all operations December 31, 2015. The announcement by Meritus Health Partners means 59,000 Arizonans it now covers need to find a new insurer by December 15 if they want coverage on January 1, 2016.
“Taxpayers should not be forced to throw good money after bad,” Grace-Marie Turner said in an interview with LifeZette. Turner is president of the Galen Institute, a not-for-profit health and tax policy research organization. “Congress would be well advised to exercise its oversight function to ensure no additional federal dollars are wasted on the program, as well as investigate how the taxpayer loans have been spent and who will pay it back,” she said.