A federal judge’s decision Thursday that the Obama administration unconstitutionally spent money to pay for part of the Affordable Care Act may not disrupt health plans or beneficiaries right away. But the fresh uncertainty immediately delivered a blow to the share prices of hospitals and health insurers.
House Republicans alleged in a lawsuit that the administration illegally spent money that Congress never appropriated for the ACA’s cost-sharing provisions. Those provisions include reduced deductibles, copayments and coinsurance many Americans receive, depending on income, for plans purchased through the ACA’s insurance exchanges.
U.S. District Court Judge Rosemary Collyer agreed with House Republicans on Thursday, writing that appropriating the money without congressional approval violates the U.S. Constitution.
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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.
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.
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Beginning next year, the annual out-of-pocket limits for all health plans sold in the (Obamacare) health insurance exchanges will be $7,150 for an individual and $14,300 for a family. To put those numbers in perspective, a $10-an-hour employee only earns about $20,000 a year.
One way to help families meet the burden of these medical expenses is with a Health Savings Account. But because the requirements for HSAs are so rigid, roughly four out of five plans sold in the exchanges are incompatible with them. One of the most nettlesome rules is the requirement that HSA plans cover only “preventive care” below the deductible. To compete for customers, especially young healthy enrollees, the insurers believe they need to make more services available with a minimum of out-of-pocket costs.
Things are about to get much worse. New rules and regulations, which become mandatory in 2018, will impose minimum and maximum deductibles and out-of-pocket limits that are inconsistent with the HSA rules.
One provision of the Patient Protection and Affordable Care Act that has been delayed until 2017 is a federal mandate for standard menu items in restaurants and some other venues to contain nutrition labeling.
Drawing on nearly 300,000 respondents from the Behavioral Risk Factor Surveillance System from 30 large cities between 2003 and 2012, we explore the effects of menu mandates. We find that the impact of such labeling requirements on BMI, obesity, and other health-related outcomes is trivial, and, to the extent it exists, it fades out rapidly.
A controversial federal health program that helps insurers withstand the ebbs and flows of the new insurance exchanges will be put under the microscope this week with the hope of making it fairer in the long term.
The CMS will host a public meeting Friday in which health insurers, state officials and others will offer their input on how to change the Affordable Care Act’s risk-adjustment methodology for 2018 and beyond. Under the permanent risk-adjustment program, which is a zero-sum game, the federal government redistributes money from plans that have lower-cost, healthier members to companies that have higher-cost, sicker members.
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Last year’s final enrollment numbers under President Barack Obama’s health care law fell just short of a target the administration had set, the government reported Friday.
The numbers are important because the insurance markets created by the president’s 2010 health care law face challenges building and maintaining enrollment. The marketplaces offer subsidized private insurance to people who don’t have access to job-based coverage.
The report from the Health and Human Services Department said about 8.8 million consumers were still signed up and paying premiums at the end of last year.
HHS Secretary Sylvia M. Burwell had set a goal of having 9.1 million customers by then.
As of the end of the third open enrollment under the Affordable Care Act, 12.7 million people had signed up for coverage in the health insurance marketplaces, up from 11.7 million last year and 8.0 million in 2014.
Actual enrollment will end up somewhat lower than this because some people will not pay their premiums or will have their coverage terminated due to inconsistencies on their applications, and there is typically additional attrition as the year progresses (e.g., as some enrollees get jobs with health benefits).
While enrollment is in line with the HHS target announced in advance of this year’s open enrollment, it is short of earlier projections by the Congressional Budget Office, which became an implicit yardstick for judging the law. In March 2015, CBO projected average monthly marketplace enrollment of 21 million in calendar year 2016, though recently lowered that forecast to 13 million.
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Congress’ decision to suspend the Affordable Care Act’s tax on health insurers for one year will cost the government $13.9 billion, funding that normally would go to cover subsidies for low-income enrollees and other functions of the law.
The CMS, therefore, expects insurance companies to keep their premiums in check when they file 2017 rates this spring. The hope is the one-year tax reprieve will put a ceiling on premium increases and push savings to consumers instead of into the coffers of health insurers.
“Because the fee is not being collected for the 2017 fee year, administrative costs for plans in all impacted markets are expected to be adjusted appropriately to account for the moratorium,” the CMS said in a document posted Monday.