In a new study published today by the Mercatus Center at George Mason University, Brian Blase assesses key predictions made by both government and nonprofit research organizations about the Affordable Care Act’s impact. The misestimates include: overestimating total exchange enrollment, overestimating enrollment of higher income people who do not qualify for subsidies to reduce premiums, projecting too many healthy enrollees relative to less healthy enrollees, and underestimating premium increases. This Forbes post focuses on the Congressional Budget Office’s (CBO) estimates.
Big news: UnitedHealth Group slashed its earnings outlook today, citing new problems related to Obamacare, and told investors it may exit the program’s exchanges. “In recent weeks, growth expectations for individual exchange participation have tempered industrywide, co-operatives have failed, and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated,” Stephen J. Hemsley, chief executive officer of UnitedHealth Group, explained in a press release.
The Government Accountability Office (GAO) found that the ObamaCare health insurance exchanges are still easily tricked by fake Social Security numbers and immigration details, even more than one year after the weakness was first pointed out. The GAO also found that many have been double-covered by private insurance and Medicaid after enrolling in an exchange plan. “Our undercover testing for the 2015 coverage year found that the health care marketplace eligibility determination and enrollment process remains vulnerable to fraud,” said Seto Bagdoyan of GAO’s Forensic and Investigative Service wrote a testimony before the House Energy and Commerce Committee’s health subcommittee.
Private insurance plans typically require some form of cost sharing, or out-of-pocket costs, such as copayments, coinsurance, and deductibles. This brief shows the cost sharing in plans sold to individuals through Healthcare.gov for 2016, with a focus on the variation in the ways plans may set cost sharing for services, such as physician visits, prescription drugs, and hospital stays.
According to HealthPocket.com, Bronze plan deductibles are rising on the Obamacare federal exchanges by an average of 11% to $5,731 and Silver Plan deductibles are rising by 6% to an average of $3,117. A survey by the Commonwealth Fund published last November found that three in five low-income adults and about 50% of adults with moderate incomes believe that deductibles are “difficult or impossible to afford.”
A recent National Bureau of Economic Research (NBER) study reveals that ObamaCare Marketplace plans are a bad deal, even for near-poor enrollees receiving large subsidies from the federal government. The study confirms that net premiums (after subsidies) were still several times what enrollees might have paid out-of-pocket for medical expenses had they remained uninsured.
According to findings from the Kaiser Family Foundation, Americans who bought the least expensive plans on the most popular tier of insurance sold on HealthCare.gov will see premium increases an average of 15% next year unless they switch to a different health plan. In nearly three-fourths of the counties where consumers can purchase insurance through the federal exchange, the plan that was the lowest-price option this year will no longer have the least expensive premium next year.
Lessons in basic economics, simple arithmetic, and crony capitalism can be learned as a result of the ACA co-op failures. In the meantime, more than 800,000 patients have had their health insurance suddenly dropped and are scrambling to find new policies from other insurers.
When President Obama’s landmark health care law ushered in a slew of new insurance options in 2013, the Andersons could not wait to sign up. But in April, when Roger Anderson fell while hiking and hurt his shoulder, he discovered, to his dismay, that simply being insured was not enough. The Andersons’ mid-tier health care plan costs them $875 a month and requires them to meet a $7,000 deductible before insurance payments kick in. Their experience echoes that of hundreds of thousands of newly insured Americans facing sticker shock over out-of-pocket costs.
The Obama administration officials are touting low premiums available during open enrollment on Healthcare.gov, but for many new patients receiving coverage under the ObamaCare exchanges, the sticker shock of sky-high deductibles leaves them just as vulnerable as before they were covered. The New York Times found that in many states, more than half the insurance plans offered on the federal exchanges had deductibles of $3,000 or more.