OF ALL the big health-insurance companies, Aetna may have been the last anyone expected to pour cold water on Obamacare. The company has over the past several years enthusiastically participated in the marketplaces the law created. Now, Aetna just announced, it is canceling plans to expand its Affordable Care Act (ACA) business and reviewing its existing products.
Aetna is not alone. UnitedHealth Group and Humana have recently made announcements in a similar vein. Among other things, many big insurers complain that their Obamacare divisions are losing money, requiring them to pay out more in medical bills than they collect in premiums. The law’s critics have seized on the news, using it as fresh evidence that Obamacare is deeply, perhaps fatally, flawed.
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Humana recently announced that next year it is withdrawing from 88% of the counties where it sold Affordable Care Act (ACA) exchange plans this year. United Healthcare forecasts higher earnings in 2017, stemming in part from its decision to shut down most of its exchange business. Aetna has cancelled plans to expand its ACA market footprint and is instead reevaluating its current participation. At least four states, Alaska, Alabama, Oklahoma and Wyoming will likely have only one exchange insurer this coming year. Sixteen of the 23 co-ops initiated with ACA funding have collapsed. And researchers supportive of the ACA estimate that insurers are requesting average gross premium increases of 23% next year These data points suggest the ACA’s individual market changes are faring poorly thus far.
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Twenty-three co-op plans, funded with $2.4 billion in government loans, opened enrollment in 2013. By the end of 2015, 12 plans had failed, leaving $1.3 billion in delinquent loans, more than 700,000 people in 13 states scrambling for coverage, and hospitals and doctors with hundreds of millions of dollars in losses uncovered by the assets of the failed co-ops.
This result is hardly surprising. The people running the co-ops had no experience running an insurance company – co-ops were forbidden to have anyone affiliated with insurers on their boards. Their premiums were too low and their benefits too high. The failed co-ops went on to lose $376 million in 2014 and more than a billion in 2015. Only one co-op turned a profit in 2014, and all lost money in 2015.
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As college students and their parents finalize their enrollment and pay tuition and fees for fall, many face one fewer headache than in years past: no more worrying about whether they’ve waived the optional health-insurance coverage in time to avoid being charged for it.
In large part because of changes brought by the federal Affordable Care Act, a number of colleges have stopped providing student health insurance.
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Aetna announced in early August that it would not expand into additional Obamacare markets and that it might consider leaving existing markets. It’s just the latest example of the failures of this massive healthcare law.
In an editorial, Investor’s Business Daily declared: “Obamacare is failing exactly the way critics said it would.” The outlet explained that Aetna had already lost $200 million thanks to Obamacare, but had expected to break even in 2016. That didn’t happen, so the company will no longer expand into five additional states and is rethinking whether it will stay in the 15 states it already offers Obamacare plans.
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Blue Cross Blue Shield of Alabama is seeking an average rate increase of 39 percent on individual plans offered through the Obamacare marketplace, according to the Centers for Medicare & Medicaid Services.
The proposed rate hikes will affect more than 160,000 people in Alabama who purchase insurance through the federal exchange, or about 5 percent of Blue Cross membership.
Rate increases range from 26 to 41 percent, depending on the type of plan. Proposed increases are lowest for bronze plans, which offer the least amount of coverage, and greatest for the most popular silver plans.
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With Donald Trump’s presidential campaign faltering, Republican health policy experts are gaming out Plan B for working with a Hillary Clinton administration to achieve conservative healthcare goals.
Their focus is on a possible “grand bargain” that would give conservative states greater flexibility to design market-based approaches to make coverage more affordable and reduce spending in exchange for covering low-income workers in non-Medicaid expansion states. A key element, conservative experts say, would be for a Clinton administration to make it easier for states to obtain Section 1332 waivers under the Affordable Care Act. Those waivers allow states to replace the law’s insurance exchange structure with their own innovative models.
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Projected employer benefit costs are a stark contrast to the expected premium increases and out-of-pocket costs on the Obamacare exchanges next year. Employer-sponsored premium increases are expected to be about half of what has been proposed on individual exchanges for next year. Net deductibles are expected to be, on average, about one-third of those on exchange plans.
The difference could be explained in part by the relative age of the different marketplaces. While insurers are still adjusting to the relatively new Obamacare exchanges, the employer-based marketplace has many more years of experience to help keep costs stable. The employer market also likely has a better mix of sick and healthy people, helping keep costs down, on average.
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Weeks after announcing a new “relationship-based” health insurance plan that would provide patients unlimited access to health coaches and primary doctors with no co-pay, Harken Health Insurance withdrew its application to open in South Florida in 2017.
Harken’s withdrawal further narrows the number of health insurance choices for customers who qualify for federal subsidies under the Affordable Care Act exchanges. Just seven companies or their affiliates have plans pending state approval, according to the federal site healthcare.gov. The nation’s largest health insurer, Harken parent company UnitedHealth, has pulled out of ACA exchanges in 31 states, including Florida.
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“If Hillary Clinton were able to institute a public option, I anticipate it would accelerate insurers’ exit from Obamacare exchanges, making it unlikely that exchanges would ever become profitable, as Medicare Advantage and Medicaid managed-care are. While those programs have bipartisan political support, Republican politicians are fully committed to opposing Obamacare exchanges.
However, a public option administered by the same contractors (subsidiaries of health insurers) which process Medicare claims would be a good business opportunity for insurers. So they should be quite happy to allow Obamacare beneficiaries to shift from risk-bearing plans to a government plan.”
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