Last week I reported on a fascinating new Wharton School study of non-poor uninsured people [1]. Another revealing finding from that same study highlights a dilemma facing any would-be health reformer: even before Obamacare, less than one quarter of health costs for uninsured persons were paid for out of pocket, regardless of family income . Think about that. Third parties already covered more than three quarters of health spending for the average uninsured family–even those with incomes above 400% of poverty. In the jargon of Obamacare, uninsured people essentially already had coverage equivalent to an actuarial value (AV) of 75%! In contrast, a Bronze plan under Obamacare has an AV of 60%, while Silver plans have an AV of only 70%.
Shopping for health insurance on healthcare.gov starting Sunday will find fewer plans offered by about the same number of insurers, the Obama administration announced Friday. A snapshot of the plans being sold on the Obamacare online marketplaces this year shows that the average consumer will have 50 plans to choose from in their county, down from an average of 58 plans last year.
When the open enrollment period for the New Mexico Health Insurance Exchange kicks off Sunday, one carrier with thousands of patients won’t be ready to offer plans through the state’s online portal. New Mexico Health Connections has announced that its insurance offerings on the exchange will be delayed by one or two weeks as some technical glitches are resolved. Dr. Martin Hickey, chief executive of the nonprofit insurance cooperative, said the plans should be available by Nov. 15. Hickey said the problem occurred as the co-op was uploading templates to the federal healthcare.gov website, where New Mexicans seeking individual coverage must go to enroll in a policy.
The Affordable Care Act (ACA) called for the establishment of non-profit “Consumer Operated and Oriented Plans” (CO-OP) to offer health insurance at lower prices and with patient, rather than corporate, interests at heart. Almost half the CO-OPs have failed in the first two years, with five failures announced just in the last month. Understanding the reasons why the CO-OPs were set up and why they failed can help us learn important lessons about the potential of government and private enterprise not just in the health care sector, but in all areas of the economy.
Insurance regulators said Friday the financial condition of Health Republic of New York, the largest of 23 health insurance co-ops established by a $2.4 billion Obamacare program, is “substantially worse than the company previously reported in its filings.” It is unclear if the co-op deliberately misled state regulators in its original filings, or if regulators found evidence of financial wrongdoing while they tried to close down the defunct non-profit. The co-op’s insolvency was announced September 25.
About 29 million people are still without health insurance, government estimates show — down more than a third since 2013. About half are eligible for subsidized coverage through the marketplaces or can enroll in Medicaid. Signing them up won’t be easy, Obamacare navigators and advocates say. Many don’t see the need for coverage, they believe it’s too expensive or they are unaware of financial assistance to lower the costs for insurance, surveys and interviews have found.
During the health reform debate in 2009 and 2010 that preceded the adoption of the Affordable Care Act (ACA), one of the prominent arguments used by advocates for national control of the health insurance market was that the existence of private market in health insurance led to “waste” in the form of advertising and marketing – costs of private health insurance that, it was claimed, raised premiums without benefiting consumers.
The Pacific Legal Foundation filed an appeal Monday asking the Supreme Court to hear a new challenge to the Affordable Care Act which argues that the ACA’s taxes are unconstitutional because they originated in a bill written by the Senate.
Under the Constitution’s Origination Clause, all bills that levy and raise taxes must begin in the House of Representatives. Contrary to this provision, the text of the ACA was written by the Senate and later adopted by the House. Senate Majority Leader Harry Reid gutted an unrelated House bill, leaving only the bill number, and in its place, he inserted the 2,076 pages of the ACA.
The PLF contends that the ACA’s taxes were therefore unconstitutionally created in a bill written by the Senate.
In 2012, the Supreme Court decided in NFIB v. Sebelius that the individual mandate, a requirement in the ACA forcing Americans to purchase health insurance or else pay a penalty, is indeed a tax. The Supreme Court did not however address the implications of the Origination Clause on this conclusion.
PLF’s lawsuit, Sissel v. U.S. Department of Health & Human Services, specifically targets the individual mandate to prove that all of the ACA’s taxes are unconstitutional under the Origination Clause.
“Beyond its assault on healthcare freedom, Obamacare represents an attack on some core constitutional principles and protections for taxpayers,” according to PLF’s Principal Attorney Timothy Sandefur. “Obamacare raises taxes by hundreds of billions of dollars, but it was enacted in violation of the Origination Clause, which was designed to safeguard against arbitrary and reckless taxation.”
Four of the nine justices must vote to hear the case before it is placed on the court’s docket.
View PLF’s petition for writ of certiorari here.
Our health care system is a complex system. As I explained in Priceless, there is no known, reliable model of how it works. Whatever policy changes we make, there are certain to be unintended consequences and they may make matters worse than when we started. So how should we approach health policy? In an article in the Journal of Legal Medicine, I argued that before we try to solve social problems in health care we should first make sure that government is not the cause of the very problems we are trying to solve. How do we do that? By identifying the major ways in which government policies create harmful, perverse incentives and then replacing them with neutral (do no harm) policies. Once we have removed the perverse incentives government has created, we will be in a position to see if there are any remaining problems that need to be solved.
HealthCare.gov is going to see some shrinkage in 2016. The number of health insurance plans available on that huge federal Obamacare marketplace for 2016 is decreasing by up to 12 percent compared with this year, industry sources told CNBC. And there will be an even sharper reduction — of more than 40 percent — in the number of health plans on HealthCare.gov known as PPO plans, which offer customers the most flexibility in where they can get medical services covered by their insurer, sources said.