Failing insurers. Rising premiums. Financial losses. The deteriorating Obamacare market that the health insurance industry feared is here.
As concerns about the survival of the Affordable Care Act’s markets intensify, the role of nonprofit “co-op” health insurers — meant to broaden choices under the law — has gained prominence. Most of the original 23 co-ops have failed, dumping more than 800,000 members back onto the ACA markets over the last two years.
Many of those thousands of people were sicker and more expensive than the remaining insurers expected — and they’re hurting results.
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Congressional Republicans are warning the Obama administration not to settle with insurers that have sued the government over an Affordable Care Act program to compensate them for losses under the law, saying such a move would bypass spending limits set by Congress.
Forty-six House Republicans signed a letter sent Thursday to Health and Human Services Secretary Sylvia Mathews Burwell saying they oppose any settlements and could sue the administration to block them.
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With major insurers retreating from the federal health law’s marketplaces, California’s insurance commissioner said he supports a public option at the state level that could bolster competition and potentially serve as a test for the controversial idea nationwide.
“I think we should strongly consider a public option in California,” Insurance Commissioner Dave Jones said in a recent interview with California Healthline. “It will require a lot of careful thought and work, but I think it’s something that ought to be on the table because we continue to see this consolidation in an already consolidated health insurance market.”
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Hillary Clinton surely is hoping health reform remains a side issue the presidential campaign as bleak news of its failures have propelled Obamacare back into the spotlight. Clinton owns Obamacare after telling Iowa voters: “I will defend the Affordable Care Act, but as president I want to go further.” She actually wants to double down, even after seeing public support for the health law tumble. She wants to create another big government “public option” that would have unlimited calls on taxpayer dollars and government force and would quickly drive remaining private insurers out of the market, leaving people with only the “choice” of a government-run health plan. We can and must do better than Obamacare, and the voters know it.
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Complications arising from the Affordable Care Act (ACA) premium tax credits (PTCs) are causing millions of people to effectively break the law. People who benefit from advance premium tax credits (APTCs) must file tax returns and include a form to reconcile the advanced amount to the actual end-of-year entitled amount. The failure of so many people to fulfill this new legal requirement has led the government to spend more than it should have as APTCs tend to be higher than legally entitled amounts.
The big news is that tax filers, as of April 28, 2016, reported $15.8 billion in total APTC payments. According to data released by HHS, I estimate the amount of APTCs paid in 2015 equaled $26.7 billion—nearly $11 billion more than the amount reported by tax filers. It appears that about 3 million households that received an APTC in 2015 had not filed the required paperwork with the Internal Revenue Service (IRS) by the end of April 2016.
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Residents who buy their health insurance themselves will pay 20 percent more on average next year, and, for the first time, residents in 14 counties will have the choice of only one carrier offering plans in their area via the state health insurance exchange.
The increases are the largest in Colorado since the 2014 launch of the Affordable Care Act, also known as Obamacare. In some parts of rural Colorado, premium increases will top 40 percent, according to figures approved Tuesday by the Colorado Division of Insurance. However, tax credits for low-income residents will help blunt the impact of some of those increases, with consumers who currently receive the credits in line to see an average decrease of 11 percent in their premiums.
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The Affordable Care Act has expanded Medicaid and has added to its unsustainable spending trajectory, according to a report from the Mercatus Center.
“Before the Affordable Care Act, the federal government provided states with an open-ended reimbursement of at least half of each state’s Medicaid expenditures,” the report states. “Because of the federal reimbursement, both state Medicaid spending and federal spending (through the reimbursement) have increased significantly since the program’s inception.”
According to the report, experts did not account for how states would respond to the reimbursement rate and underestimated the number of enrollees and their related costs.
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Yahoo Finance’s Ethan Wolff-Mann, who may have the best name in journalism, writes it’s not true that ObamaCare has caused employers to reduce workers’ hours because the new Kaiser Family Foundation/Health Research Educational Trustsurvey found “a whopping 7% of employers with more than 50 employees actually gave part-timers full-time jobs since Obamacare was officially launched in 2013. Only 2% of employers cut full-timers to part-time.” Leaving aside the question of whether 7 percent is a whopping figure, the figures Wolff-Mann cites don’t necessarily support his claim.
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A new Urban Institute report claims premiums for plans sold in ObamaCare’s health-insurance Exchanges are lower than comparable premiums for employer-sponsored health plans. Unfortunately, Urban scholars used sleight of hand to hide the full premiums for ACA plans. Incorporating the full premiums shows Exchange plans are more expensive.
The study’s authors used the premiums that HealthCare.gov and state-run Exchange web sites quote prospective enrollees. Yet those quotes do not reflect the full premium for Exchange plans.
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As ObamaCare’s troubles mount, I’ve heard my patients and my peers in healthcare ask: How could the law’s authors not have seen this coming?
For my part, I think a different question needs to be asked: What if they did? What if ObamaCare was purposely designed to fail?
Every day, it seems like there are a dozen new headlines about the crisis facing ObamaCare. Premiums are rising faster than ever. Meanwhile, health insurance companies are abandoning the law’s exchanges left and right, unable to compete in the top-down, regulation-driven environment created by the law. Less than three years into its implementation, the law has never looked so precarious.
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