Along with releasing end-of-the-year 2015 enrollment data for the Affordable Care Act exchanges last Friday afternoon, the Department of Health and Human Services also released data for the 2016 open enrollment period. Just like the end-of-the year 2015 enrollment data, which I discussed on Monday, a close look at the 2016 open enrollment data reveals that the ACA is significantly underperforming initial expectations.
The big story is how little has changed from 2015 to 2016. The number of 2016 exchange enrollees is up only slightly from last year, and the make-up of the risk pool—as proxied by income and age of enrollees—is virtually identical.
Last year’s final enrollment numbers under President Barack Obama’s health care law fell just short of a target the administration had set, the government reported Friday.
The numbers are important because the insurance markets created by the president’s 2010 health care law face challenges building and maintaining enrollment. The marketplaces offer subsidized private insurance to people who don’t have access to job-based coverage.
The report from the Health and Human Services Department said about 8.8 million consumers were still signed up and paying premiums at the end of last year.
HHS Secretary Sylvia M. Burwell had set a goal of having 9.1 million customers by then.
Ask the price of anything and the answer is always the same: What insurance do you have? Patients are blocked from shopping for fair value. The part of the Affordable Care Act which was supposed to control insurance costs, perversely, incentivizes insurers to pay higher, not lower costs. Under the Affordable Care Act, premiums and profits are legally permitted to rise only as health costs rise. In short, when it comes to pricing, nobody is watching the store and citizens cannot shop to protect themselves from medical price gouging.
This former hospital president says that because billing rates are not set, the health industry is able to prey on patients at their most vulnerable. And if you are out of network or uninsured, you pay the highest rates.
Most people who got tax credits to buy insurance under the federal health law will be repaying part of them for the second year in a row, according to a leading tax preparer.
H&R Block Inc. executives said Tuesday that, to date, 60% of 2015 tax filers with the credit have found that they owe the government money because they had been credited too much. That is up from 52% last year, the first year in which filers had to reckon with reporting the credit and figuring out if their income projections had been accurate.
On average, tax filers were repaying almost $580 each for excessive credits, up from $530 for overpayments during the 2014 filing year.
The Federal government wants to leave doctors and hospitals on the hook for medical bills unpaid by the failed ObamaCare co-ops.
A top official at the Centers for Medicare and Medicaid Services told Congress that the government, not medical providers, has the first right to any remaining co-op funds. This CMS policy ignores a 1993 U.S. Supreme Court decision that says the federal government is next to last in line for payment in insurance cases, and policyholders should come first.
Twelve of the 24 co-ops funded through the ACA have failed and are going through the liquidation process. At least 800,000 people have had to find other coverage after their co-op policies were cancelled.
. . .
The insurance industry must be kicking itself for backing ObamaCare. Several have since posted big losses and it looks like Blue Cross Blue Shield got the losing end of the stick, too.
Fitch Ratings looked at nearly three dozen BCBS companies and found that 23 saw a decline in earnings that totaled $1.9 billion in the first nine months of last year, while 16 had net losses.
Blue Cross Blue Shield of Michigan lost $622 million from January through September last year. Blue Cross plans in Texas, Oklahoma, New Mexico and Montana lost $442 billion. And those in Pennsylvania, Delaware and West Virginia lost $266 million.
The reason is ObamaCare.
Or as Fitch puts it: “Cost and utilization trends from state insurance exchanges from the Affordable Care Act have been higher than anticipated and are the primary drivers of declining earnings.”
In a major win for the industry, health insurers will not be forced to have minimum quantitative standards when designing their networks of hospitals and doctors for 2017, nor will they have to offer standardized options for health plans.
The CMS released a sweeping final rule (PDF) Monday afternoon that solidifies the Affordable Care Act’s coverage policies for 2017. The agency proposed tight network adequacy provisions and standardized health plan options in late November, which fueled antipathy from the health insurance industry.
Monday’s rule relaxes those aggressive proposals, a move that likely will raise the ire of consumer groups that have pushed for stronger insurance protections for patients. It does, however, include some victories for transparency advocates. The federal government, for example, will now have to publish all changes to premium rates, not just increases that are subject to review.
Political uncertainty isn’t the only threat to the Affordable Care Act’s future. Cracks also are spreading through a major pillar supporting the law
Health insurance exchanges created to help millions of people find coverage are turning into money-losing ventures for many insurers.
The nation’s largest, UnitedHealth Group Inc., could lose as much as $475 million on its exchange business this year and may not participate in 2017. Another major insurer, Aetna, has questioned the viability of the exchanges. And a dozen nonprofit insurance cooperatives created by the law have already closed, forcing around 750,000 people to find new plans.
More insurer defections would lead to fewer coverage choices on the exchanges and could eventually undermine the law, provided the next president wants to keep it.
Transitional Reinsurance is a key part of the Affordable Care Act. It’s a component of a set of provisions designed to lure private health insurers into selling insurance on various Exchanges. Without continued private insurer participation, Obamacare as we know it falls apart. Congress thought it needed lures (1) because health insurers did not have much experience with the medical expenses of the population they would be insuring and (2) because Congress was outlawing health insurers’ favorite technique for staying profitable: pricing policies according to the predicted medical expenses of the insured. Congress set the hook by giving insurers selling on the Exchanges something for free that they otherwise would have to pay for: reinsurance. With “Transitional Reinsurance” The federal government would itself pick up the bill three years for much of the expense of insureds who ended up having high medical expenses.
But, as with lunch, there is really no such thing as free reinsurance.
Donald Trump had a complete meltdown Thursday night when he got locked in this exchange with Marco Rubio over health care. Rubio kept pressing him on what his plan for health care was, and Trump responded by incoherently talking about getting rid of “the lines around the states.” Essentially, Trump wants to increase competition by allowing insurers to sell plans across state lines without regard to the states’s own insurance regulations.
Setting aside the fact that Trump’s understanding of health care policy is woefully inadequate, his one idea on health care isn’t even a good one. Granted, this is an idea a lot of Republicans have floated and, in theory, increased insurance competition is needed and state insurance regulations are often an impediment to this. But in practice, the idea runs into the buzzsaw of federalism.