Last week, the U.S. Senate approved legislation that would repeal the majority of ObamaCare. The bill will almost certainly pass the House. From there, it will go to the president’s desk, where it faces an even more certain veto. Even so, we are witnessing a historic moment. The House and Senate have held dozens of votes to repeal ObamaCare in whole or in part. Congressional Republicans have even worked with President Obama to repeal or curtail portions of the law. But while full-repeal legislation has passed the House, nothing like the bill that just passed the Senate has come anywhere near the president’s desk.
Individuals who do not obtain health coverage, through any source, are subject to a tax penalty unless they meet certain exemptions. The penalties under the so-called individual mandate were phased in over a three-year period starting in 2014 and are scheduled to increase substantially in 2016. This analysis from the Kaiser Family Foundation provides estimates of the share of uninsured people eligible to enroll in the marketplaces who will be subject to the penalty, and how those penalties are increasing for 2016.
Those without health insurance have a lot to consider. On one hand, the fine for remaining uninsured steeply increases for next year. On the other, the cost of the individual mandate penalty is cheaper than buying the least expensive insurance plan for 7.1 million of the nearly 11 million uninsured eligible to enroll in health exchanges, according to a Kaiser Family Foundation analysis released Wednesday.
“Woefully sloppy and willfully ignorant” is how Chairman Tim Murphy (R-PA) described the oversight of the state-run health insurance exchanges at an Energy & Commerce oversight hearing Tuesday.
Andy Slavitt, Acting Administrator for the Centers for Medicare & Medicaid Services (CMS), testified before the subcommittee on the use of federal funds provided to establish state-based marketplaces under the Affordable Care Act.
CMS doled out more than $5.5 billion in grant money to construct exchanges in 17 states, but lawmakers now question whether this money has been used properly. Chairman Murphy noted that every single state exchange faces significant budget shortfalls. For example, $733 million was given to establish state exchanges in Hawaii, Nevada, New Mexico, and Oregon. All four exchanges failed to become self-sustaining and were forced to transition consumers to the federal marketplace. It is increasingly unclear whether or not the money will be recouped.
Congresswoman Marsha Blackburn (R-TN) questioned Slavitt about a recent report from the Government Accountability Office which revealed that some state exchanges’ information technology systems were still functioning improperly. The report found that CMS “did not always clearly document, define, or communicate its oversight roles and responsibilities to states as called for by best practices for project management.” State administrators say communication with CMS has been poor, which “adversely affected states’ deadlines, increased uncertainty, and required additional work.”
CMS is charged with reviewing states’ funding requests and conducting audits to ensure all money is being spent legally. After January 1, 2015, states were not allowed to spend grant money on operation expenses such as rent, utilities, telecommunications, or software maintenance. Chairman Murphy cited a report from the Office of Inspector General revealing that Washington state may have used its grant money for operational costs, contrary to law.
Slavitt contended all current state marketplaces are sustainable despite these compelling challenges. When asked by Congressman David McKinley (R-WV) whether anyone has lost their job for giving erroneous advice to the state exchanges, Slavitt was unable to provide a single name.
Tuesday’s hearing was the second Energy & Commerce oversight hearing to address the tumultuous problems within the state marketplaces in an effort to ensure that taxpayer dollars are being spent wisely and in accordance with the law.
Sen. Marco Rubio’s efforts against the so-called risk corridor provision of the Affordable Care Act, which was intended to help insurance companies cope with the risks they assumed when participating in the health care law’s new marketplaces, has shown the effectiveness of quiet legislative sabotage. Because of Rubio’s efforts, the administration says it will pay only 13% of what insurance companies were expecting to receive this year.
There is a political duty to prevent the coming bailout of big health insurers if Congress is serious about achieving repeal of ObamaCare. Individual Americans who have been harmed by the health care law aren’t eligible for an administration-provided bailout. Nor did doctors get help with the increased costs of bureaucratic compliance. Instead, the administration gave top priority to the interests of its corporate friends and supporters. This is crony capitalism at its worst.
Federal officials said Monday that if uninsured people don’t obtain coverage within the health law’s official enrollment period, which ends Jan. 31, they won’t get an extension to avoid the law’s penalty for going without insurance this time around. Earlier this year, the Obama administration offered uninsured people a reprieve if they missed the sign-up deadline for 2015 coverage, originally set at Feb. 15. People were given through April to sign up if they said they had learned about the penalty for going uninsured only when they filed their taxes.
Cigna CEO David Cordani says the individual market created by the 2010 health law would be better off if insurers were given more flexibility in designing coverage, as well as a more compressed, focused open enrollment period. Just days after UnitedHealth Group’s CEO said their move into the new marketplace was a mistake, Cordani reaffirmed that Cigna remains committed for 2016, although the firm is so far losing money on that business.
The penalty for failing to have health insurance is going up next year, perhaps even higher than expected. Among uninsured individuals who are not exempt from the ObamaCare penalty, the average household fine for not having insurance in 2015 will be $661, rising to $969 per household in 2016, according to a Kaiser Family Foundation analysis.