The impact of ObamaCare on doctors and patients, companies inside and outside the health sector, and American workers and taxpayers

Could it be that the highly compensated insurance-company actuaries are lousy at math? For months, we’ve been reading stories about how big medical bills incurred by Obamacare enrollees are driving publicly traded insurance companies from the exchanges. Some affiliates of the venerable Blue Cross Blue Shield Association (BCBS), reeling from the costs of paying medical claims for a population that is unhealthier than expected, have joined the stampede to the Obamacare exits, while others seek premium increases of as much as 60 percent or sue the government for corporate handouts to offset their losses.

The apparent desperation of insurance-company CEOs might lead you to believe that Obamacare was failing. Not a chance, according to the Centers for Medicare and Medicaid Services.
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There are a lot of people in the U.S. who dream of single-payer health care. And what a dream it is! Government as the only entity paying for care, able to drive down costs while ensuring universal coverage. There are not a lot such dreamers who think that the transition to such a system is imminent here.

Politically, it may be easier to get a single-payer system on the ballot in a blue state than it is to get it onto the floor of the U.S. Congress. But practically, it’s even harder to implement one that doesn’t bankrupt the government and enrage the citizenry. Such an experiment would certainly have effects on health-care policy for the rest of the nation — presumably a swing away from single payer.

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Blue Shield of California is shutting down for the four days after Labor Day to reduce its payroll-related liabilities, citing losses in California’s Covered California Obamacare exchange and other commercial and individual lines of business.

The move will affect most of its 6,000 employees in California, except about 1,000 who work for Care1st, which it acquired last fall for $1.2 billion, and some staffers in customer service and related areas who will remain on the job. The exact number of workers involved hasn’t yet been tabulated, according to the San Francisco-based insurer.

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A new report in Health Affairs has found that the smoking penalties imposed by the Obamacare health plans have not succeeded in getting smokers to quit. Even worse, the penalties have deterred some smokers from obtaining health insurance in the first place.

The health insurance plans offered on the exchanges established by the Affordable Care Act (ACA) cover smoking cessation treatment with no cost sharing. As a further “nudge” to quit smoking, the insurance plans charge tobacco users up to 50 percent more in premiums than non-users. For purposes of the surcharge, a Department of Health and Human Services regulation defines tobacco use as self-reported consumption of “any tobacco product, including cigarettes, cigars, chewing tobacco, snuff, and pipe tobacco, four or more times a week within the past 6 months.”

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Washington experts have been frequently wrong about the Affordable Care Act.

They projected far more enrollees in ACA exchanges than materialized. They also projected that the individual insurance market would stabilize in 2016 with robust competition. Instead, the country is grappling with enormous premium hikes and fewer choices.

A new government report reveals perhaps the largest mistake yet: Medicaid enrollees who gained coverage through the ACA cost almost 50 percent more, on average, than the government projected just one year ago.

ACA supporters often point to Medicaid expansion as the law’s greatest success since it reduced the overall uninsurance rate. We now know that result comes with a gigantic price tag.

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A government report finds that the cost of expanding Medicaid to millions more low-income people is increasing faster than expected, raising questions about a vital part of President Barack Obama’s health care law.

The law provided for the federal government to pay the entire cost of the Medicaid expansion from 2014 through the end of this year.

Obama has proposed an extra incentive for states that have not yet expanded Medicaid: three years of full federal financing no matter when they start. But the new cost estimates could complicate things.

In a recent report to Congress, the Centers for Medicare and Medicaid Services said the cost of expansion was $6,366 per person for 2015, about 49 percent higher than previously estimated.

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The Affordable Care Act has overwhelmed large swaths of the economy, and the Administration is poised to upend yet another, by overriding Congress’ directives on how Medicare pays for the medicines that physicians prescribe under that program. Patients, healthcare providers and drug manufacturers all stand to suffer from the Administration’s disregard of a statutory mandate that controls over $20 billion in payments a year.

In the Medicare statute, Congress laid out a formula for Part-B drugs (those you get at a doctor’s office): Providers receive 106% of the average sales price—that is, the going rate plus a little to cover overhead costs. Enter the Centers for Medicare and Medicaid Innovation (CMMI), a bureaucracy within a bureaucracy, created to test “innovative payment and service delivery models.” CMMI recently proposed to “test” an approach to paying for Medicare Part-B drugs that will change reimbursements for three-quarters of the country.

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“Irony is wasted on the stupid.” This quote, attributed to Oscar Wilde, seems fitting in light of the Obama administration’s new campaign to block two blockbuster mergers between the health insurers Aetna and Humana and Anthem and Cigna. (It is also fighting hospital consolidation in many states.) The administration is rightly worried that this will lead to higher health care costs through reduced competition, yet it ignores the fact that its signature law, the Affordable Care Act, was specifically designed to foment such consolidation.

The central planners behind the Affordable Care Act – also known as Obamacare – were convinced that consolidation in health care would lead to decreased health care spending by eliminating duplication, standardizing treatment protocols and incentivizing better utilization. As three of Obamacare’s primary authors wrote in The Annals of Internal Medicine in 2010, the law was designed to “unleash forces that favor integration across the continuum of care.” No part of health care was supposed to be spared – doctors, hospitals, insurers, pharmaceutical companies and others were given regulatory and financial incentives to merge.

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Over the past year, a new wrinkle has emerged. Federally subsidized co-ops included in the ACA after the defeat of the government-payer “public option” began failing rapidly when Congress limited their potential subsidy to taxes collected through the ACA. Most of them have now closed after having lost access to nearly unlimited amounts of red ink in the HHS budget. Joining them are a growing number of private insurers, unhappy about the losses they continue to absorb in Obamacare exchanges.

In short, the individual markets keep marching closer and closer to collapse. Whether or not the imposition of a single-payer system on all Americans in a crisis was the secret plan all along for ACA advocates, the existential crisis for this market is nearly upon us. This is the time to spring socialized medicine in the US, right?

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Clinton tried hard to get health reform passed when she was first lady in the 1990s. Now that President Obama has done that, she would continue to implement his law if she wins in November. But she has shown a deep interest in more healthcare reform, proposing a number of policies aimed at making coverage more affordable.

Last fall, she released a plan to reduce prescription drug costs that included capping out-of-pocket drug expenses for consumers and requiring pharmaceutical companies to pay larger rebates to Medicare for low-income patients.

In a healthcare proposal on her campaign website, she also calls for requiring insurers to cover more doctors visits even before a patient pays the deductible and providing families with a tax credit to help pay for out-of-pocket health expenses.

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