Category: Implementation

The Obama administration on Friday announced changes to ObamaCare sign-up rules that are intended to cut down on people gaming the system and address a complaint from insurance companies that they say is causing them to lose money.

The Centers for Medicare and Medicaid Services announced that it is tightening the rules for enrolling in one of ObamaCare’s extra sign-up periods.

The CMS unveiled an interim final rule late Friday that could help the Affordable Care Act’s struggling co-op plans. The rule also responds to insurers’ complaints that people are abusing special enrollments in the exchanges.

The CMS tightened the use of special enrollments, specifically making the rules around moving to a new home more restrictive to avoid any gaming of the system. Co-ops also can seek outside funding from investors to build up their capital, something that was outlawed previously.

Insurers — who might not be allowed the huge rate increases they need to stay solvent — are looking to save money by eliminating so-called Bronze-level plans.

Fierce Health Player reports on an Inside Health Policy (subscription only) warning from earlier this week:

One problem, according to the article, is risk adjustment–as CMS data indicate bronze is the only metal level for which insurers of all sizes in the individual and group markets had to pay into the program. Federal officials are considering some changes to the risk adjustment program, which some say unfairly penalizes smaller insurers.Already, filings show a CareFirst BlueCross BlueShield subsidiary in Virginia will transform its bronze plans into silver-level plans for 2017, according to Inside Health Policy, and experts tell the publication this could set a troubling precedent for the industry.

Iowa’s insurance commissioner filed a lawsuit against the federal government on Tuesday, saying it is withholding $20 million in connection with the liquidation of not-for-profit insurer CoOportunity Health — which failed in December 2014.

“Through the wind down of CoOportunity, we’ve worked collaboratively with the Centers for Medicare and Medicaid Services and the federal government on many issues,” said Insurance Commissioner Nick Gerhart in a news release. “In this instance, we tried diligently to settle our differences with the federal government in extensive discussions over several months, but were informed by the Department of Justice that further negotiations would be futile.”

Gerhart said U.S. Department of Health and Human Services and CMS have “tried to jump to the head of the creditor line,” and are not following Iowa or federal law.

. . .

Humana’s announcement Wednesday that it is considering raising premiums and changing or eliminating plans makes it only the latest insurer to say it might scale back involvement on the Affordable Care Act exchanges next year. Here’s the $9 billion question those insurers that remain on the ACA marketplaces ought to consider: What happens if Donald Trump is elected–and cuts off their access to ObamaCare cost-sharing subsidies?

Subsidies related to the 2010 health-care law aim to help reduce co-payments and deductibles for low-income individuals who meet certain criteria. House Republicans challenged the subsidies in court in late 2014, arguing that because the text of the Affordable Care Act does not include a specific appropriation for the subsidies, the executive branch cannot spend money Congress never disbursed.

Humana became the latest health insurer to serve notice that it might leave some Affordable Care Act exchanges next year, creating more uncertainty for customers ahead of this fall’s enrollment window and presidential campaign, during which the law is sure to remain a hot debate topic.

The insurer, which is being acquired by rival Aetna, said Wednesday that it expects to make a number of changes to its business for 2017, and that may include leaving some markets both on and off the exchanges or changing prices. Humana Inc. sold coverage in 15 states this year.

. . .

UnitedHealthcare’s decision to not offer Affordable Care Act exchange plans next year in “at least 26 of the 34 states where it sold 2016 coverage” may soon be followed by similar announcements from other health care insurers.

At least that is one implication that can be drawn from the findings reported in a new paper analyzing the performance of insurers that offered exchange coverage in 2014.

The paper’s authors—Heritage Foundation senior research fellow Ed Haislmaier, Mercatus Center senior research fellow Brian Blase, and Galen Institute senior fellow Doug Badger—examined enrollment and financial data for the 289 Qualified Health Plans sold on the exchanges in 2014.

They found that, in the aggregate, insurers incurred substantial losses offering exchange coverage. Furthermore, the poor results were despite insurers receiving substantial subsidies—indeed, more than they originally expected—through the Affordable Care Act’s “reinsurance” program.

. . .

U.S. health insurer Humana Inc, which plans to be bought by larger Aetna Inc, is considering ending the sale of ObamaCare individual plans in some states in 2017 to stem losses there.

Humana’s individual business, which sells plans under President Barack Obama’s Affordable Care Act, has been a drag on results, and the company still expects to lose money this year. Humana sells plans in 15 states.

The company said on Wednesday that first-quarter earnings fell 46 percent due to higher costs in individual plans, including ObamaCare, and its direct-to-customer Medicare Advantage plans.

. . .

The biggest victory for taxpayers in the Obamacare fight so far was the enactment in late 2014 of language prohibiting the Risk Corridor program from being transformed into an open-ended bailout for big insurance companies.  Unfortunately that language is now being sidestepped by a scheme in which the Obama administration invited the big insurance companies to sue the government, which in turn is likely to take a dive on the lawsuit and then make the bailout payments anyway.  It’s outrageous and must be stopped.

At the time Congress debated the funding restriction, both the Congressional Budget Office and the White House Office of Management and Budget agreed that the provision neither spent nor saved any taxpayer money.  That was because the administration maintained the program would, as Obamacare supporters had always claimed, be run in a budget-neutral fashion, paying out to insurance companies only what the program itself had already collected from other insurance companies.

. . .

With the nation’s largest health insurer exiting all but a few Affordable Care Act exchanges next year, some Americans may be left with fewer choices and some might see higher monthly premiums.

Experts say that will be the upshot of UnitedHealth Group Inc.’s recent announcement that it will pull out of most of the 34 states where it offers health plans on the public health insurance exchanges.

The public health insurance exchanges are online marketplaces where people can shop for and enroll in a health plan. This is the third year of operation for the exchanges, a key component of ObamaCare.

Meanwhile, health insurers stung by the high cost of covering public health exchange enrollees, are expected to request sharply higher rates for 2017.

. . .