A few weeks ago, the administration issued new regulations in a last-ditch attempt to save the few remaining CO-OP organizations.
Articles on the implementation of ObamaCare.
The not-for-profit insurers that are planned to form the backbone of the Obamacare exchanges, including the Blues health plans, reported yesterday that they lost a lot of money in the first quarter of 2016. It was the same day that United Healthcare announced that it was pulling out entirely from the California exchanges–a state that many Obamacare acolytes held up as a model for the law’s successful execution.
In statutory filings that they posted this month, the not-for-profit health plans showed an average negative net margin of -2.5% during the first quarter of 2016. AIS Health Plan Week revealed the data on 41 not-for-profit plans. Credit Suisse reported on those results in a report issued yesterday. The total net losses among the 41 health plans approached a whopping $1.5 billion for the quarter.
. . .
The American people have become familiar with ObamaCare’s failings: higher premiums, fewer choices and a more powerful federal health bureaucracy. Yet another important piece of health-care legislation, signed into law last year, has gone almost unnoticed.
The Medicare Access and CHIP Reauthorization Act, known simply as Macra, was enacted to replace the outdated and dysfunctional system for paying doctors under Medicare. The old system, based on the universally despised sustainable-growth rate formula, perennially threatened to impose unsustainable cuts in physicians’ fees.
. . .
UnitedHealth Group Inc. is leaving California’s insurance exchange at the end of this year, state officials confirmed Tuesday.
The nation’s largest health insurer announced in April it was dropping out of all but a handful of 34 health insurance marketplaces it participated in. But the company had not discussed its plans in California.
UnitedHealth’s pullout also affects individual policies sold outside the Covered California exchange, which will remain in effect until the end of December.
. . .
Two recently filed lawsuits illustrate continuing difficulties the administration faces in implementing the Affordable Care Act, particularly under the constraints imposed upon it recently by Congress. Specifically, the suits illustrate the legal difficulties for the administration created by Congress’ limiting of “risk corridor” payments—made to insurers with high claims costs—to amounts contributed to the risk corridor program by insurers with low costs. Last year, CMS announced that it would have only $362 million in contributions to pay out $2.87 billion in requested payments, and so would only pay out 12.6 cents on the dollar for payment claims.
. . .
Ohio’s co-op will become the thirteenth of the 23 co-ops created under the Affordable Care Act to fold.
The Ohio Department of Insurance requested to liquidate the state’s health insurance co-op, InHealth Mutual, the state announced Thursday. Nearly 22,000 Ohio residents will have 60 days to replace their InHealth policy with another company’s on the federal exchange.
“Our examination of the company’s financials made it clear that the company’s losses would prevent it from paying future claims should its operations continue,” Mary Taylor, the Ohio Director of Insurance and the state’s lieutenant governor, said in a statement.
. . .
News that a CareFirst BlueCross BlueShield subsidiary will stop selling bronze level plans on the Virginia marketplace next year prompted some speculation that it could signal a developing movement by insurers to drop that level of coverage altogether. The reality may be more complicated and interesting, some experts said, based on an analysis of plan data.
Bronze plans provide the least generous coverage of the four metal tiers offered on the insurance marketplaces, paying 60 percent of benefits on average, compared to 70 percent for silver plans, which are far more popular. During the 2016 open enrollment period, 23 percent of marketplace customers signed up for a bronze plan, compared with 68 percent who chose silver, 6 percent who picked gold and 2 percent who chose a platinum plan.
. . .
The first change would limit the restriction on people with health insurance experience to those who have been “an officer, director, or trustee,” and it limits “pre-existing insurer” to those to who were active in the individual or small-group markets prior to July 16, 2009. This would open up the field of potential CO-OP board members to people who had (a) worked for health insurers active only in the large-group market, or (b) worked for any insurer, but in a lower-level capacity.
According to a legal opinion letter by former White House Counsel C. Boyden Gray, the answer is YES.
In this recording of a May 26, 2016 media conference call, experts describe the Obama administration’s decision to pay health insurers generous reinsurance subsidies while stiffing taxpayers, despite a statutory requirement that fixed sums must go to the U.S. Treasury.
Mr. Gray’s letter reinforces the conclusion of experts at the nonpartisan Congressional Research Service, who also found that the administration’s actions “would appear to be in conflict with the plain text” of the ACA regarding the Transitional Reinsurance Program.
Speakers on the call:
- Doug Badger, Senior Fellow, Galen Institute
- Derek Lyons, Counsel, Boyden Gray & Associates
- Tom Miller, Resident Fellow, American Enterprise Institute
For more on this issue, read our column at Forbes. The media call was sponsored by the Galen Institute, which also commissioned the legal opinion letter from Mr. Gray. (The recording starts about two minutes into the call with Doug Badger speaking.)
Obamacare is entering a new stage. The recent announcement by United Health Care that it will stop selling insurance to individuals and families through most health insurance exchanges marks the transition. In the next stage, federal and state policy makers must decide how to use broad regulatory powers they have under the Affordable Care Act to stabilize, expand, and diversify risk pools, improve local market competition, encourage insurers to compete on product quality rather than premium alone, and promote effective risk management. In addition, insurance companies must master rate setting, plan design, and network management and effectively manage the health risk of their enrollees in order to stay profitable, and consumers must learn how to choose and use the best plan for their circumstances.
. . .
Smaller insurers with experience in Medicaid, such as Centene Corp. and Molina Healthcare, are outperforming the broader insurance industry on the federal health exchanges. Their success is putting a spotlight on their business model as the Obama administration and other insurers seek to stabilize the fledgling individual market.
If Medicaid-like plan features become the norm, consumers and medical providers would be substantially affected. Such plans are often popular in the exchanges for their low premiums, but consumers have criticized limits on their access to medical providers such as doctors. And physicians fault the plans for low reimbursement rates.
. . .