Articles on the implementation of ObamaCare.

Cigna CEO David Cordani says the individual market created by the 2010 health law would be better off if insurers were given more flexibility in designing coverage, as well as a more compressed, focused open enrollment period. Just days after UnitedHealth Group’s CEO said their move into the new marketplace was a mistake, Cordani reaffirmed that Cigna remains committed for 2016, although the firm is so far losing money on that business.

 

Everyone knows ObamaCare subsidizes low-income individuals, but few are aware it also subsidizes big insurance companies. Corporate welfare payments to insurers under the risk corridor and reinsurance programs (both of which are slated to expire in 2017) amounted to $10.4 billion for the 2014 benefit year. In ObamaCare’s first year, “excess” losses outpaced “excess” gains by $2.5 billion. The White House wants taxpayers to make up the difference.

The ObamaCare program for small business in Illinois—known as SHOP—has been troubled from the start. Only two insurers sold health plans on the online marketplace to Chicago small businesses: startup Land of Lincoln Health and Blue Cross & Blue Shield of Illinois. Now there’s just one. Facing massive financial losses, Chicago-based Land of Lincoln has stopped signing up new small-business customers.

This week, as part of the reconciliation bill, Congress may vote on bailing out health-insurance companies losing money from their participation in the Affordable Care Act exchanges. With an $18 trillion national debt, Congress should stand firm and say no to the bailouts.

Insurance companies were relying on payments from the federal government to constrain their losses as part of a device known as “risk corridors.” Risk corridors allow the government to bear a portion of the costs if they become too high. Section 1342 of the Affordable Care Act states that the secretary of HHS can reimburse insurance companies if the costs of covering sick people exceed the premiums received. However, the act did not provide an appropriation for these funds. In order for risk-corridor funds to be distributed, Congress has to appropriate them.

Land of Lincoln Health, an insurance co-op created under ObamaCare, is no longer taking new small-business customers. The health insurer announced in October that it would severely cap enrollment on the exchange, HealthCare.gov, and limited new small-business clients in particular to help the co-op survive long term. More than half of the co-ops nationwide have failed.

Why is enrollment so low among families making significantly more than the poverty line? Part of the answer might be because ObamaCare itself imposes a significant series of new taxes on that same middle class, denying them the disposable income needed to purchase ObamaCare plans. A few of these tax increases include the Flex Spending Account Tax, the High Medical Bills Tax, the Medicine Cabinet Tax, the Individual Mandate Non-Compliance Tax, the Tanning Tax, and the Health Savings Account Withdrawal Tax.

One in five of us needs mental-health treatment at any given time, and for those who get good care, the recovery rate is between 60 percent and 80 percent — higher than in many other medical fields. But only about 40 percent of the people who need treatment get any help, and those who do “often get bounced around in a system that leaves them feeling misunderstood, stigmatized, brushed aside.”

Political discussion aside, The Affordable Care Act will fail for business reasons. The fundamental reason the ACA will fail is because it mandates a minimum Medical Loss Ratio (MLR), or the percentage of premiums paid out to cover health care expenses. The problems associated with mandating MLR are two-fold: 1) incentivizing the insurance industry to become less efficient; 2) contributing to the elimination of new insurers entering the market and increasing the level of competition.

The latest turmoil in health insurance marketplaces created by the Affordable Care Act has emboldened both conservatives who want to shrink the federal role and liberals who want to expand it. UnitedHealth Group announced last week that it may pull out of the marketplaces in 2017 after losing money this year. This followed the collapse of 12 of the 23 nonprofit insurance cooperatives created with federal loans under the health law. In addition, insurance markets in many states are unstable. Premiums are volatile and insurers say their new customers have been sicker than expected.

Michael Cannon of the Cato Institute, Tarren Bragdon of the Foundation for Government Accountability, and Daniel Landon of the Missouri Hospital Association joined former Secretary of the Department of Health & Human Services (HHS) Kathleen Sebelius to discuss Medicaid expansion under the Affordable Care Act.

Complete footage of the debate is available here: Part 1Part 2Part 3Part 4Part 5, and Part 6.