Health plans would likely feel the financial hit if the courts ultimately strike down Obamacare’s cost-sharing subsidies. That’s because those payments go directly to insurers to make up for lower payments from their poorest customers.
A federal court ruled today that the Obama administration has been improperly funding the cost-sharing subsidies. The ruling is stayed pending appeal, so there will be no immediate fallout for health plans.
But at stake is approximately $175 billion over a decade that insurers would receive to subsidize their Obamacare customers. Cost-sharing subsidies are available to enrollees with incomes below 250 percent of the federal poverty level who enroll in silver plans. They’re designed to reduce out-of-pocket costs when those individuals access medical care.
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As the fourth year of Obamacare approaches, Politico’s Paul Demko reports that consumers can expect more of the same price hikes and narrowed choices as they have seen the first three years. The Obama administration insists that prices only rose eight percent for 2016 over the previous year – even though that itself is still more than three times the rate of inflation, and ignores states like Minnesota where the average premium increase was over 30 percent.
“There are reasons to think the next round may be different,” Demko warns. He quotes a Deloitte executive who agrees. “A number of carriers need double-digit increases” for 2017. Those price increases will hit the Obamacare exchanges on November 1st, one week before voters elect a new President and Congress.
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The leaders of the House GOP effort to replace the Affordable Care Act (ACA) will brief lawmakers at a closed-door meeting Thursday before publicly releasing their plan in June.
The meeting, which will be attended by Speaker Paul Ryan (R-Wis.), marks the first time the task force will lay out a draft of its plan after months of conversations with members, according to a House GOP aide.
The plan is expected to include numerous standard Republican health policy ideas — including a controversial proposal to cap the employer tax exclusion for health insurance, according to two Republican lobbyists.
Democrats have long attacked Republicans for failing to come up with an alternative healthcare plan, but leaders, including Ryan, have promised to produce one that could be taken up by a GOP president next year.
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Today, a federal judge sided with the House of Representatives in a major lawsuit challenging executive branch overreach,ruling that the Obama administration has been making illegal payments to health insurance companies participating in the Affordable Care Act (ACA) exchanges. U.S. District Court Judge Rosemary Collyer found that Congress never appropriated the billions of taxpayer dollars that the administration has delivered to insurers through the ACA’s cost sharing reduction (CSR) program. Today’s decision is a victory for the rule of law. It may also give insurers pause about their future participation in the exchanges.
The issue raised by the House of Representatives lawsuit is that the executive branch cannot spend money without a congressional appropriation since Article I of the Constitution gives Congress the power of the purse. Today, Judge Collyer agreed, writing “Paying out [cost-sharing subsidies] without an appropriation violates the Constitution. Congress is the only source for such an appropriation, and no public money can be spent without one.”
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House GOP leaders announced Wednesday at a weekly closed-door conference meeting that they will present members with an update on the Republican Obamacare replacement plan on Thursday afternoon, according to a senior GOP aide.
The same day, Democrats and Republicans in a key committee had a civil conversation about health care policy, indicating where that debate may be heading.
The Obamacare replacement plan is part of House Speaker Paul Ryan’s (R-Wis.) promise to put together a conservative agenda ahead of the Republican convention this summer.
While the plan is not yet finalized, a hearing in Energy and Commerce Committee’s health subcommittee on Wednesday offered hints of what the replacement plan might contain. Committee members are mulling various ways to handle pre-existing conditions, quality of coverage, affordability and insurance regulation.
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A federal judge on Thursday ruled the Obama administration has been improperly funding an Obamacare subsidy program, a huge win for the House of Representatives’ lawsuit against the White House.
The judge said that the program can continue, pending appeal. The ruling, if it stands, could be a significant financial setback for the millions of low-income Americans who benefit from the cost-sharing subsidies, which help people pay for out-of-pocket costs like co-pays at the doctor’s office.
Congress authorized the program but never actually provided the money for it, wrote U.S. District Court Judge Rosemary M. Collyer, a George W. Bush appointee.
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For months during the Democratic presidential nominating contest, Hillary Clinton has resisted calls from Senator Bernie Sanders to back a single-payer health system, arguing that the fight for government-run health care was a wrenching legislative battle that had already been lost.
But as she tries to clinch the nomination, Mrs. Clinton is moving to the left on health care and this week took a significant step in her opponent’s direction, suggesting she would like to give people the option to buy into Medicare.
“I’m also in favor of what’s called the public option, so that people can buy into Medicare at a certain age,” Mrs. Clinton said on Monday at a campaign event in Virginia.
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Rising healthcare costs are Americans’ primary financial concern. In fact, a recent survey found that 76% of Americans are concerned about increasing health insurance costs with nearly two-thirds more concerned this year than they were last year. As is now clear, the Affordable Care Act is making the problem worse. A recent S&P Global Institute report (not publicly available) showed that healthcare spending per individual market enrollee increased by nearly 70% in the first two years after the key provisions of the ACA took effect.
A recent Mercatus working paper, authored by Brian Blase, along with Doug Badger of the Galen Institute and Ed Haislmaier of the Heritage Foundation, found that insurers made risk corridor claims of $273 per enrollee on individual market qualified health plans—plans that comply with the ACA and are certified to be sold on exchanges—in 2014. Risk corridors were designed to transfer money from insurers that made profits selling QHPs to insurers that incurred losses on QHPs. Assuming that a fully-funded risk corridor program would have subsidized about two-thirds of insurer losses, insurers likely lost around $400 per enrollee in 2014. Since insurers enrolled about 8 million people in 2014, they likely lost about $3.2 billion overall selling individual QHPs.
The House Energy and Commerce Committee Republicans can’t find most of the $200 million that the Obama administration claims it recouped from state-based health care exchanges as part of a federal grant program to help them set up shop, according to a new report obtained by Morning Consult.
Centers for Medicare and Medicaid Services Acting Administrator Andy Slavitt told the committee in December that “over $200 million” had been returned to federal coffers from the state exchanges since the grant program went into effect.
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The Obama administration could give states more power to manage the Affordable Care Act’s risk adjustment program, in a concession to critics who complained that the program unfairly penalized certain companies and threatened to destabilize the exchange system.
The new policy, which was issued late on May 6, encourages state insurance commissioners to seek “local approaches” to easing the impact of the risk adjustment process on small and high-growth health plans. That language appears to open the door to allowing states to artificially limit the amounts that companies might have to pay into the program each year.
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