More than six years of efforts by Republican and other right-of-center opponents to repeal, replace, or substantially reshape Obamacare have fallen short.
The strategic options ahead for Obamacare critics on the right are:
- Rinse and repeat: more of the same
- Gamble on a more ambitious long-shot strategy
- Adapt tactically in the near term, to minimize future damage
House Republicans released their latest plan – “A Better Way” – to repeal and replace the Affordable Care Act last month. It blends all three of the strategies above, but its lite brew for reform remarkably manages to be both too cautious and too unrealistic all at once.
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House Speaker Paul Ryan says he has heard personally from actuaries for a major health insurer that Obamacare is “failing.” Speaking at a Wednesday breakfast for Ohio delegates to the Republican National Convention, Ryan said that actuaries for Blue Cross Blue Shield have told him the Affordable Care Act is going downhill faster than they expected.
“As I said in the beginning, this healthcare law is going to collapse under its own weight,” Ryan said. “I met with all these actuaries from Blue Cross Blue Shield a little while ago, and they said ‘Well, congressman, the law is failing two years ahead of schedule,'” he added. “Meaning, basically, they saw it coming, but they didn’t think it would be this bad so fast.”
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Things have gone from bad to worse for the Affordable Care Act’s health-care co-op experiment.
Maryland’s co-op, Evergreen Health, filed a first-of-its-kind lawsuit in June against the federal government claiming that private insurers have gamed the system to avoid making “risk adjustment payments.” Under the ACA, insurers with healthier members must make these payments to insurers with unhealthier members. But Evergreen CEO Peter Beilenson argues that his co-op was unfairly labeled as healthier because private insurers encouraged their less healthy members to go to the doctor so their patient pools would appear less healthy. Evergreen is now expected to owe between $18 million and $22 million in risk adjustment payments.
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Only about one-third of health insurers came out ahead in their first year in the ObamaCare marketplace, according to a study by the Commonwealth Fund released Wednesday.
While insurers made nearly twice as much money from healthcare premiums in 2014, overall profits “diminished noticeably” because of higher payouts, according to the expansive new analysis on companies participating in the exchanges.
Overall, health insurers underestimated their total medical costs by about 5.7 percent in their first year.
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The Republican platform seems to have taken its cue from Speaker Paul Ryan’s A Better Way, at least when it comes to health policy. Not surprisingly, health care did not get top billing in the 66 page document. The economy, jobs, and taxes led off, with the Affordable Care Act, Medicare, and Medicaid relegated to later chapters. Although there is not much text, those words are important.\
Significantly, the platform takes up Medicare and Medicaid in the chapter on government reform. The document points out that Medicare’s long-term debt is in the trillions, and does not shrink from recommending actions that could set the program on a fiscally sound path. That requires change that will not be welcomed by everyone, so the platform pushes off that change for a decade in the hope of not alienating the senior vote. Nonetheless, the Republican Party has now officially endorsed Ryan’s premium support plan that can promote competition and more efficient health care.
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A provision of the Affordable Care Act that allows insurers to charge smokers higher premiums may have discouraged smokers from signing up for insurance, undercutting a major goal of the law, according to a study published this month.
The surcharges, of up to 50 percent over nonsmokers’ premiums, also showed no sign of encouraging people to quit.
The Affordable Care Act eliminated insurers’ ability to charge higher premiums based on whether a person was sick. But it does allow them to vary premiums with age, geography, family size and smoking status.
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State and federal officials have negotiated a deal to delay a federal policy that threatened to destabilize health insurance rates at small businesses across Massachusetts.
Governor Charlie Baker’s administration said Tuesday that the agreement will postpone for one year a piece of the Affordable Care Act that requires a change in the way small businesses’ insurance rates are calculated. Massachusetts will have to phase out its current rules and switch to the federal formula by 2019.
The rules apply to businesses with 50 or fewer employees.
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Top insurer UnitedHealth Group said Tuesday its 2017 earnings will benefit as it mostly exits the ObamaCare exchanges, its worst-performing business line.
UnitedHealth reported second-quarter earnings of $1.96 per share, up 13% from a year earlier, handily beating analysts’ estimates of $1.89. Still, the company just slightly raised its full-year earnings outlook to $7.80-$7.95 a share from $7.75-$7.95, roughly in line with consensus estimates for $7.89.
The high end of its full-year 2016 earnings guidance held steady because worse-than-expected results in its ObamaCare individual market business called for a conservative outlook, management said in an earnings call.
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California’s Obamacare customers can expect a hefty increase in their monthly health insurance premiums next year.
Covered California, the state’s Obamacare marketplace, released proposed premiums Tuesday morning, and the statewide average increase for 2017 will be 13.2 percent.
Peter Lee, the agency’s executive director, cited factors including increased medical costs and the end of a federal “reinsurance” program as main drivers of the increase.
Blue Shield and Anthem Blue Cross customers will face the steepest increases.
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Fifteen of the health insurance cooperatives started with federal dollars through the Affordable Care Act have failed — four of them just this month — saddling taxpayers with an estimated $1.7 billion in bad loans.
Common Ground Healthcare Cooperative is one of seven still standing.
But the next few months will determine whether Common Ground, which insures about 20,000 in 19 counties in eastern Wisconsin, manages to survive.
“I’m confident we’ll make it through this year,” said Cathy Mahaffey, its chief executive officer since 2014.
Beyond that, though, Common Ground faces an uncertain future.
The cooperative has lost $84.8 million from its inception in 2012 through the end of last year and owes the federal government $107.7 million.
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