Articles on the implementation of ObamaCare.
Another insurer sued the U.S. government to recoup unpaid payments under the ACA’s risk-corridor program, but it’s looking less and less likely that the feds will ever pay up.
Sanford Health Plan, the insurance arm of Sioux Falls, S.D.-based Sanford Health, sued the federal government, demanding it pay nearly $9 million in overdue risk-corridor payments for 2014 and 2015. The CMS so far has paid Sanford Health Plan just 15.1% of the amount it owes, according to the complaint filed last week in the U.S. Court of Federal Claims.
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Given by a drop-off in enrollment after President Trump took office, total sign-ups for Obamacare health plans fell this year for the first time, a new report released by the Trump administration Wednesday indicates.
A total of 12.2 million Americans enrolled in a plan through one of the healthcare law’s marketplaces during the 2017 open enrollment period, according to the report, which provides a final tally of this year’s signups.
The 2017 final figure, which updates a preliminary report released last month, was down from 12.7 million in 2016.
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Anthem Inc. and other U.S. health insurers complained to the White House for more than a year that they were losing money on people who waited to sign up for Obamacare coverage until they were sick.
They pleaded with the Obama administration to stem their losses by tightening up on the enrollment rules. When their pleas went unmet, UnitedHealth Group Inc, Humana Inc, and Aetna Inc pulled out of most of the government subsidized health insurance market.
But now that the new Trump administration and Republican lawmakers control the future of healthcare, the industry is getting a new hearing.
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Republicans are getting battered at town halls on ObamaCare, with constituents—or least protestors—yelling about the benefits they’ll lose if the entitlement is repealed. But maybe the better measure of public sentiment is the choices that the people who are subject to ObamaCare have made in practice. Consider the remarkable persistence of health insurance plans that aren’t in compliance with the ACA’s rules and mandates. These “grandfathered” and “grandmothered” plans aren’t obligated to meet ObamaCare’s very high “essential benefits” floor, nor are they required to obey price controls that limit how much premiums can differ based on pre-existing medical conditions. These regulatory differences have thus set up an instructive market test about the need for ObamaCare’s mandates. 8.1 million people chose to remain in their existing plans instead of purchase ACA coverage.
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The United States Court of Federal Claims just ruled that the federal government failed explicitly to appropriate money for an ACA program known as “Risk Corridors” to stabilize the ACA exchanges, and therefore sent the United States an $8 billion bill to make these payments to insurers. It is unlikely that this decision will result in much money actually being sent to insurers or in many insurers returning to the ACA markets. Many of the insurers owed money have already gone out of business. Others have, quite literally, written off any chance of recovering any of this money. Insurers are instead likely to see the money as a bit of a windfall that will not affect business decisions one way or the other as to whether and how to remain in the ACA marketplace.
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Molina Healthcare’s stock tumbled after hours Wednesday after the health insurer posted a fourth-quarter loss that was attributed to parts of Obamacare — a big problem for one of the health insurers that has had success in the program.
However, the company didn’t lose money because it had sicker-than-expected enrollees. In fact, medical costs for its Obamacare enrollees were $120 million lower than Molina thought. Instead, Molina got slammed because it had healthier members and had to pay $325 million into an Obamacare program called risk adjustment, which pools money from insurers in a given state and redistributes it to those who had higher-cost enrollees.
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While Republicans continue to grapple with plans to repeal and replace Obamacare and stabilize health insurance rates, Humana is the first major insurer to say it is dropping out of the individual market for 2018.
“Based on our initial analysis of data associated with the company’s health-care exchange membership following the 2017 open enrollment period, we continue to see further signs of an unbalanced risk pool,” said Humana CEO Bruce Broussard, on a conference call with analysts Tuesday. “Therefore, the company has decided that it cannot continue to offer this coverage for 2018.”
In the wake of the news, President Donald Trump tweeted that the insurer’s decision was another example of the failure of the Affordable Care Act, and he reiterated his plan to “repeal, replace & save healthcare for ALL Americans.”
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Following an Obama administration order, the IRS had been set to require taxpayers to indicate on line 61 on their form 1040s whether they had maintained health coverage in 2016 or paid the penalty. The IRS would have rejected returns if taxpayers failed to report their coverage status. But the IRS announced this week it would not reject returns that failed to check the appropriate ObamaCare boxes—an early indication of the administration’s efforts to provide relief from ACA mandates.
“This year, the IRS put in place system changes [initiated by the Obama administration] that would reject tax returns during processing in instances where the taxpayer didn’t provide…information [attesting that the taxpayer had health insurance].
“The recent executive order [issued on day one of the Trump administration] directed federal agencies to exercise authority and discretion available to them to reduce potential burden. Consistent with that, the IRS has decided to make changes that would continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status.”
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The conceit that the five major commercial health insurers will consolidate to three seems to be dissolving, as four of those insurers called off a pair of mega-mergers on Tuesday. After 18 months of courtship among the Big Five starting in 2015, the outgoing Obama Justice Department’s antitrust division sued to block the $34 billion Aetna- Humana tie-up as well as Anthem’s $48 billion acquisition of Cigna. Federal judges blocked both transactions earlier this year. Anthem had planned to appeal but on Tuesday Cigna pulled the plug after Aetna and Humana did the same.
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Healthcare.gov enrollment came in well below what was anticipated last month. After running very slightly ahead of last year’s numbers in December, January brought the news that about 400,000 fewer people had enrolled on the federal exchanges than did so in 2016. Those are scary numbers, not so much for the absolute size of the decline—it’s roughly 4%—but because any backwards movement is very bad news for the exchanges. Trump was only president for a few days’ worth of open enrollment. Could he really have somehow caused 400,000 people to forgo health insurance?
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