The impact of ObamaCare on doctors and patients, companies inside and outside the health sector, and American workers and taxpayers
One primary goal of the Affordable Care Act (ACA) was to expand access to affordable health care. However, in the five years since the ACA’s passage, we have found that while more people have health insurance, they do not necessarily have access to affordable health care.
In order to pay for the subsidies that have facilitated the expansion of health insurance coverage, many recipients of federal funds were forced to accept payment reductions. Hospitals were faced with cuts of $260 billion over ten years. These reductions came in the form of delayed payment updates for Medicare hospital services and reduced Disproportionate Share Hospital (DSH) payments meant to compensate hospitals for treating a high percentage of patients for whom the hospital is often inadequately reimbursed. The justification for the cuts to hospital payments was based on assumptions that, by increasing insurance coverage to millions of people, fewer individuals would go to the emergency room (ER) to receive care—where they would potentially be treated for free subject to the Emergency Medical Treatment and Labor Act (EMTALA)—and instead could seek care in non-hospital settings such as physician offices, outpatient clinics, urgent care centers, etc.
One of the key questions surrounding Obamacare is just how many people have been newly insured under the law. The answer is clouded by the fact that the White House and others have changed some rules of math for making these assessments.
For example, several years ago, the Obama Administration fiddled with Census Bureau’s definition of what it means to be “uninsured.” The new parameters, which were looser than the old factors, make it hard to construct comparisons between today’s figures for the total number of uninsured and the historical trends.
The Obama team also abruptly started to exclude uninsured illegal immigrants from the national tally on total number of uninsured Americans. Before Obamacare, these individuals were counted in that reporting, inflating the numbers. After Obamacare, these individuals didn’t get insurance, but suddenly didn’t get counted any more.
Now, a new analysis from the highly regarded managed care analyst at Goldman Sachs, Matthew Borsch, and his team, cast uncertainty on some of the recent data releases from the White House, and its network of academicians. In particular, the Goldman breakdown conflicts in some key ways with a recent analysis from RAND that was published in the journal Health Affairs and widely cited by the media.
Republicans are being ridiculed by the right and the left for weighing ideas that would rescue ObamaCare health insurance policies for people in 37 states if the petitioners prevail in King v Burwell.
“Republicans Are Now Trying To Pass Obamacare Extension To Save Their Own Asses,” writes Allen Clifton in Forward Progressives. “GOP Gets Ready to Save the Day If the Court Strikes Down Obamacare Subsidies,” says Rush Limbaugh.
If the Supreme Court decides against the Obama administration in the case, leaders in Congress are indeed determined to pass legislation to protect coverage for an estimated six million people. ObamaCare has so distorted the market for individually-purchased and small group health insurance that Congress has little choice but to throw them a safety net.
Two years in, there’s a lot we still don’t know about Obamacare. How many people will it end up insuring? What will the premiums look like? How much will the program cost?
Some of these questions won’t be answered satisfactorily for a while, if ever. Even the most basic data point, on how many people have gained coverage, comes from Gallup polls and is a little murky. The percentage of people saying they don’t have health insurance has fallen from about 17 as enrollment kicked off to about 12 now. The easing of the recession has presumably helped that.
Other answers, however, will come into focus in the next year or so. The most important being: What will the market for individual insurance look like once Obamacare is in full effect?
In 2011, analysts were speculating that Assurant Health might exit the insurance business, the Milwaukee Journal Sentinel reported last week. So the recent news that Assurant’s parent company was looking to “sell or shut down” the insurance carrier by year’s end was not a total surprise. The issue now is whether its demise holds larger lessons about Obamacare’s impact on insurance markets.
One analyst called Assurant, which reported operating losses of nearly $64 million in fiscal 2014 and $84 million in the first quarter of fiscal 2015, a “casualty” of the law. The Affordable Care Act “required health plans to cover a package of basic benefits and required health insurers to spend at least 80 cents of every premium dollar on medical care or quality initiatives,” the Journal-Sentinel reported. Simply put, the law made health insurance more like a regulated utility—with plan designs, benefits, and overhead costs strictly regulated.
Obamacare supporters generally argue that these regulatory changes eliminate the potential for customer confusion or the sale of “substandard” insurance products. But further Journal-Sentinel reporting underscores a complication of that approach:
Waste: After spending billions on state-run ObamaCare exchanges, the federal government is only now writing clear rules on how that money can be spent, while half of the exchanges head toward bankruptcy.
state-run exchanges were supposed to form the beating heart of ObamaCare. And the Obama administration dumped almost $5 billion in an effort to make it a reality.
The results have been a disaster.
Of the 37 states that received $2.1 billion in grants to establish an exchange, only 17 did so, and they got an additional $2.7 billion from the feds.
Of those 17, two went bankrupt in the first year. One of them, Oregon, had received a $60 million “early innovator grant.” Residents of those states now use the federal Healthcare.gov site.
A memo from Health and Human Services’ Inspector General Daniel Levinson warns that some of the remaining may be violating federal law in an effort to stay afloat.
Two Republican committee chairmen are pressing the Obama administration to improve its oversight of how state-run ObamaCare marketplaces use federal dollars, citing an inspector general report on potential violations of law.
Sens. Orrin Hatch (R-Utah) and Chuck Grassley (R-Iowa) wrote to the head of the Centers for Medicare and Medicaid Services (CMS) on Monday asking for the agency to issue clarifying guidance on how the federal dollars can be spent.
State-run ObamaCare marketplaces received federal funds to help set themselves up, but after Jan. 1 of this year, they marketplaces are supposed to be self-sustaining. They are now prohibited by law from using federal funds for “operating expenses.” They can only use the money for “design, development, and implementation.”
The problem is that the definition of these two categories can be unclear, as noted by an HHS Inspector General report late last month. The senators want clearer definitions from CMS.
State-based marketplaces (SBMs) “cannot be allowed to use hard-earned taxpayer dollars for expenses that are statutorily prohibited,” the senators write.
This tax season, millions of Americans are feeling the impact of the ACA on their tax return for the first time. Those who failed to obtain minimum essential health insurance coverage last year will have had to send the Internal Revenue Service (IRS) a check for $1,130, on average.1 Setting aside the impact on these millions of people’s wallets, this figure is also worth noting because it highlights the ineffectiveness of the individual mandate. Yes, the estimated 6.3 million people paying the penalty didn’t buy health insurance, but neither did the more than 30 million who qualified for an exemption from the mandate.2 If the mandate were 100 percent effective, everyone would have health insurance. However, there were still tens of millions of people uninsured in the U.S in 2014.
Sen. David Vitter (R-La.) has a simple question: How and why did Congress qualify as a “small business” eligible for special taxpayer subsidies under the Affordable Care Act (ACA)? For anyone in a real small business — private employers who get no such subsidies — the very idea is absurd. But getting a straight answer is as difficult as getting Lois Lerner’s IRS emails.
In search of answers, Vitter proposed subpoenaing documents from the District of Columbia Health Benefits Exchange Authority. But his colleagues on the Small Business and Entrepreneurship Committee recently voted (14 to five) to block the effort. They’ve tried to justify their lack of curiosity by calling the proposed subpoena an unnecessary “distraction” or an invitation to a “protracted” legal fight. But these are rather obviously lame excuses.
With Milwaukee-based Assurant Health continuing to bleed red ink, its parent company announced in a Tuesday news release it will either sell the health insurer or exit the health insurance business.
Assurant Health’s product lines include Time Insurance and John Alden. The company has more than 1,000 employees at its downtown Milwaukee offices, 501 W. Michigan St.
The impact on those employees will depend on whether the company is sold and the business strategy of a buyer.
“It’s premature for us to comment on possible outcomes,” said Assurant Inc. spokeswoman Vera Carley of impact on employees.