California politicians and interest groups have been working overtime to figure out a way to fix an illegal Medicaid provider tax—the subject of my recent Mercatus Center study. These taxes are problematic because they are generally accompanied with the guarantee of increased Medicaid payments to the providers paying the tax—payments largely financed with federal matching funds. As a result, provider taxes, which reek of government favoritism because of how the benefits often target select providers, raise Medicaid spending.
California’s tax is illegal under federal law because the state was holding numerous insurers harmless from the tax that should not have been. The state has recently come up with a revised tax plan that it is submitting for federal approval.
Unlike the last few election cycles, paid political advertising that features healthcare issues hasn’t played a starring role in the early primaries.
But once the Democratic and Republican nominees are selected, watch out.
The Affordable Care Act and other healthcare issues are going to get plenty of screen time, according to experts who track campaign advertising. Indeed, one analyst estimates healthcare messages, combining both pro- and anti-Obamacare ads, will account for nearly one-fifth of the more than $6 billion that will be spent in this year’s massive onslaught of television and digital advertising to voters in the presidential, congressional and gubernatorial campaigns.
Health Care Service Corp. improved its net loss in 2015, but the Blue Cross and Blue Shield conglomerate continues to hemorrhage money in the Affordable Care Act’s nascent marketplaces.
HCSC, which owns the Blue Cross and Blue Shield affiliates in Illinois, Montana, New Mexico, Oklahoma and Texas, lost $1.5 billion on its individual ACA-compliant plans in 2015, according to financial filings. After factoring in a premium deficiency reserve, an accounting measure that predicts future losses, the insurer lost $866 million last year on its ACA plans, said Ken Avner, HCSC’s chief financial officer.
According to the GAO report, billions of dollars in Obamacare subsidies were paid out in 2014 to individuals with “unresolved inconsistencies” regarding their eligibility for coverage:
• As of April 2015, more than 431,000 applications — amounting to $1.7 billion in taxpayer subsidies — had unresolved paperwork discrepancies dating to 2014.
• Roughly 22,000 applications that may (or may not) have been filed by people serving prison sentences added up to another $68 million in subsidies. (Prisoners are not eligible for Obamacare coverage.) The Centers for Medicare and Medicaid is required to check a national database to verify an applicant is not incarcerated, but since the CMS learned that the data in the database wasn’t up to date, CMS’ new official policy is to — get this — take the applicant’s word as to his or her incarceration status.
• Another 35,000 applications with varying forms of inconsistency with their Social Security numbers received subsidies worth $154 million.
The Obama administration, responding to consumer complaints, says it will begin rating health insurance plans based on how many doctors and hospitals they include in their networks.
At the same time, the maximum out-of-pocket costs for consumers under the Affordable Care Act will increase next year to $7,150 for an individual and $14,300 for a family, the administration said. Consumer advocates said those costs could be a significant burden for middle-income people who need a substantial amount of care.
Under new rules to be published Tuesday in the Federal Register, insurers will still be allowed to sell health plans with narrow networks of providers. But consumers will know in advance what they are getting because the government will attach a label indicating the breadth of the network for each plan sold on HealthCare.gov.
There may finally be one thing Republicans hate more than ObamaCare: TrumpCare.
The GOP front-runner, after weeks of talking in vague terms about his plans for the health care system, put out a seven-point proposal Wednesday night, just in time for the GOP debate in Detroit and four more primary contests this weekend.
But within hours, Republican opinion leaders in health care were already piling on.
“It has the look and feel of something that a 22-year-old congressional staffer would write for a backbencher based on a cursory review of Wikipedia,” wrote Avik Roy, the opinion editor at Forbes who has advised several GOP presidential candidates on health policy, including Mitt Romney in 2012.
Obamacare does not have a mandate. Wait: Has Marco Rubio proposed an individual mandate? The Cato Institute’s Michael Cannon and James Capretta of AEI have engaged in a spirited and informative point-counterpoint on that question here at NRO. Cannon writes that Rubio’s Obamacare-replacement plan is built “around an individual mandate.” Capretta responds by noting that Rubio proposes to repeal all of Obamacare, including “the requirement that all Americans buy government-approved health insurance,” commonly known as the individual mandate.
Pulling Americans from Obamacare’s wreckage should be among the next president’s most urgent priorities. Costs are rising, choices contracting, and regulation metastasizing. Reform will not be easy to achieve. Replacing Obamacare will require open and robust discussion, a process that is more likely to succeed if we’re all speaking the same language and using words to inform, not inflame.