A new wave of failures among ObamaCare’s nonprofit health insurers is disrupting coverage for thousands of enrollees and raising questions about whether regulators could have acted earlier to head off some of the problems.
Four ObamaCare co-ops have failed due to financial problems since the beginning of the year, the latest trouble for the struggling program.
The co-ops were set up under ObamaCare to increase competition with established insurers, but just seven of the original 23 co-ops now remain.
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Since Obamacare’s rollout in the fall of 2013, 16 co-ops that launched with money from the federal government have collapsed.
The co-ops, or consumer operated and oriented plans, were started under the Affordable Care Act as a way to boost competition among insurers and expand the number of health insurance companies available to consumers living in rural areas.
Now, just seven co-ops—Wisconsin’s Common Ground Healthcare Cooperative; Maryland’s Evergreen Health Cooperative; Maine Community Health Options; Massachusetts’ Minuteman Health; Montana Health Cooperative; New Mexico Health Connections; and Health Republic Insurance of New Jersey—remain.
Thomas Miller, a resident fellow at the American Enterprise Institute who is an expert in health policy, said each of the seven remaining co-ops have “warning indicators” leading up to when, and if, they fail.
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Thousands of Illinoisans heeded federal law and bought health insurance last year via the state’s Obamacare exchange. They signed up with Land of Lincoln Health, a state-approved insurer. They paid their premiums and deductibles. Many counted on that coverage to manage chronic illnesses or other long-term treatment.
Now, a kick in the teeth: Land of Lincoln has collapsed. Its customers must scramble for new coverage in an upcoming “special enrollment” period. They will have 60 days to find another plan on the Illinois exchange to cover the last three months of the year.
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Humana will exit eight of the 19 individual health insurance markets where it has sold Obamacare plans this year, the insurer announced Thursday.
The company is still struggling to make a profit on the exchanges, according to its second quarter earnings guidance released Thursday. The company expects to offer individual plans in 156 counties across 11 states compared to the 1,351 counties in 19 states it has offered plans in the year, according to a release.
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The Trump health plan reportedly would make 18 million people uninsured by 2017. But by entirely repealing Obamacare and all its attendant taxes and regulations, the plan also is expected to reduce net federal savings over 10 years of $583 billion and reduce premiums in the non-group market by at least 20%. Progressives surely would be aghast at this prospect and you can be certain that unless Trump modifies the plan’s key features, Hillary Clinton will make it an important campaign issue this fall. But what should the average American think about this trade-off? It all comes down to how much Americans should be forced to pay to prevent each year of being uninsured.
To figure this out, we need to know the total amount that Americans would save if Obamacare were repealed and the net increase in uninsured person-years that would result.
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President Barack Obama and Hillary Clinton over the past week have both called for a new government-run insurance option. But the “public option”— which some Democrats have been trying to enact since health law negotiations in 2009 — isn’t a panacea for the problems plaguing Obamacare, Harvard expert Katherine Baicker tells POLITICO’s “Pulse Check” podcast.
“More competition in insurance markets is a great idea,” Baicker said. “It’s not clear to me that the public option is going to be an effective way to introduce that competition.”
Baicker, a respected economist who served on President George W. Bush’s Council of Economic Advisers, has standing to weigh in: In the JAMA article where Obama laid out his public option earlier this week, no expert was cited more than her.
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The Illinois Insurance Department moved Tuesday to shut down Land of Lincoln because of its unstable financial health, leaving about 49,000 policyholders in a lurch. They will lose coverage in the coming months, but neither regulators nor the company have said exactly when.
Policyholders will be able to buy insurance from a different carrier to cover them for the rest of 2016, according to the state Insurance Department. But switching plans is going to cost them.
The co-pays and deductibles enrollees have been paying since January will not transfer to new plans. A new plan will reset deductibles and out-of-pocket maximums paid by consumers.
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Illinois moved Tuesday to take control of Land of Lincoln Health to begin an orderly shutdown of the insurance company, meaning about 49,000 people will lose their health coverage in the coming months.
The state said it will allow policyholders to buy coverage from a different insurer before their Land of Lincoln plans are terminated, but it’s unclear when the policies will lapse.
“It’s a bad day for the marketplace in Illinois and our consumers,” said Jason Montrie, president and interim CEO of Chicago-based Land of Lincoln. “This is the end.”
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The number of insurers carrying out one of the Affordable Care Act’s most idealistic goals continues to plummet, with just seven nonprofit member-run health plans set to take part in the law’s fourth enrollment season this fall.
That’s down from 23 such plans — co-ops, as they are commonly known — that started in 2014. Eleven are still in business, but four in Oregon, Ohio, Connecticut and Illinois will fold soon because of financial insolvency. Just Tuesday, the Land of Lincoln Mutual Health Insurance Co. was ordered to close by Illinois regulators.
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Oregon’s nonprofit ObamaCare health insurance co-op is winding down operations due to financial problems, the second such announcement this week for the troubled co-op program.
The announcement is just the latest in a long string of failures of ObamaCare’s co-ops, non-profit health insurers set up to increase competition with established insurers. Before this week, just 10 of the original 23 co-ops remained functioning, and Republicans have seized on the problems.
Oregon’s Department of Consumer and Business Services announced Friday that it is taking over the insurer, known as Oregon’s Health CO-OP, and will liquidate the company.
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