Anthem Inc., the No. 2 U.S. health insurer by membership, said medical spending rose in the second quarter, driven by higher costs from the insurer’s Affordable Care Act plans and Medicaid business.
The shares dropped as much as 4.1 percent, the biggest intraday decline since April 27, and were down 0.5 percent to $136.95 at 9:55 a.m. Anthem said it spent 84.2 cents of every premium dollar on medical care, up from 82.1 cents a year earlier.
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Two scholars at the renowned Brookings Institution, Loren Adler and Paul Ginsburg, have published an analysis finding that “average premiums in the individual market actually dropped significantly upon implementation of the ACA [Affordable Care Act].” This contrasts with a plethora of evidence, including a rigorous 2014 Brookings study, showing that the ACA significantly increased premiums. In this post, I discuss methodological concerns with the Adler and Ginsburg approach as well as evidence that leads most scholars to reach a very different conclusion.
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Anthem Inc. said it is now projecting losses on its Affordable Care Act plans this year, a turnaround for a major insurer that had maintained a relatively optimistic tone about that business.
Anthem said it now believed it would see a “mid-single-digit” operating margin loss on its ACA plans in 2016, due to higher-than-expected medical costs. It expects better results next year, because it is seeking substantial premium increases.
Anthem’s financial performance on ACA plans had previously been a relative bright spot among major insurers, many of which continue to struggle.
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Health insurer Anthem Inc on Wednesday vowed to fight U.S. government efforts to block its planned acquisition of Cigna Corp and said it expects to lose money this year on its business selling individual health coverage under President Barack Obama’s healthcare law.
Anthem has argued that its planned $45-billion purchase of Cigna will give it greater leverage to negotiate better prices from healthcare providers and pass on those savings to consumers, including those signing up for “Obamacare” plans on public insurance exchanges.
“To be clear, our board and executive leadership team at Anthem is fully committed to challenging the (U.S. Department of Justice’s) decision in court,” Chief Executive Joseph Swedish told analysts on a conference call.
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At issue in House v. Burwell is whether the administration has been illegally paying cost-sharing reduction subsidies to insurers. This issue was also the subject of a Republican House investigation, which resulted in a recent report concluding that the administration knowingly made the payments without a congressional appropriation, which is illegal.
In May, district court judge Rosemary Collyer sided with the House, deeming the payments illegal. The administration is appealing. If it is unsuccessful, it will be a serious blow to already struggling Obamacare exchanges.
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Bernie Sanders said Monday night that the Democratic party’s platform — and this election — is about universal healthcare and giving the citizenry a public option.
Other Democrats including Massachusetts Sen. Elizabeth Warren, New York Sen. Kirsten Gillibrand and First Lady Michelle Obama also touted the importance of healthcare in the election.
“I am happy to tell you that at the Democratic Platform Committee there was a significant coming together between the two campaigns and we produced, by far, the most progressive platform in the history of the Democratic Party,” Sanders said.
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The insurer Cigna is expanding into a few new ObamaCare markets, a countervailing force to some recent high profile exits by insurers.
Cigna, one of the nation’s largest health insurers, said Tuesday that it has filed to offer insurance on the ObamaCare marketplaces next year in Chicago, the Raleigh/Durham area of North Carolina, as well as Northern Virginia and Richmond.
The move comes as some other large insurers have announced they are pulling out of ObamaCare marketplaces because of financial losses. Humana announced last week that it will participate in no more than 11 states next year, down from 19.
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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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The Affordable Care Act continues to provide an opportunity for religious zealots to complain that someone, somewhere, might be doing something of which they disapprove. Another such case advancing through the courts is that of Missouri State Rep. Paul Wieland and his wife, Teresa, who assert that Obamacare’s contraceptive mandate tramples on their family’s religious rights even if they don’t make use of it.
St. Louis Federal Judge Jean Constance Hamilton thinks they may have a point. On Thursday she denied the government’s motion to throw out the case on summary judgment. Merely requiring individuals to buy an insurance policy that provides contraception could infringe on their religious conscience, she ruled in clearing the case for trial.
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